DSCR Loans
You don’t need tax returns to buy your next rental property. A DSCR loan qualifies you based on what the property earns — not what you report on your 1040. AFC has been closing DSCR loans for investors across 17 states.
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DSCR Loans
You don't need to hand over two years of tax returns to buy your next rental property. A DSCR loan qualifies you based on what the property earns — not what you report on your 1040. At AFC Mortgage Group, we've been closing DSCR loans for real estate investors across 17 states since before most lenders knew what the acronym stood for.
What Is a DSCR Loan?
DSCR stands for Debt Service Coverage Ratio — it compares a property's rental income to its total mortgage payment. If the rent covers the mortgage, the ratio is 1.0 or higher and you qualify. No W-2s, no pay stubs, no tax returns, no employment verification. The property is the borrower.
This matters enormously to investors with complex finances — self-employed borrowers, business owners who write off aggressively, investors with ten or twenty properties whose DTI ratios are high even though cash flow is strong. A conventional lender sees red flags. We see a performing asset.
Who Is a DSCR Loan Right For?
Experienced landlords scaling portfolios. Self-employed investors whose tax returns don't reflect true earnings. Airbnb and short-term rental operators. Investors purchasing in an LLC for liability protection. Out-of-state investors buying in other markets. High-net-worth borrowers preferring asset-based lending. And first-time investors with strong credit wanting a faster qualification path.
How DSCR Loans Work at AFC
Step 1: Property Analysis. Send us the property details and we'll calculate the DSCR ratio on the spot using actual market rents verified through appraisal.
Step 2: Application and Credit Review. We pull credit (660+ minimum), collect entity documents if closing in an LLC. No tax returns, no income docs. The paperwork is a fraction of conventional financing.
Step 3: Appraisal and Rent Verification. The appraisal includes a rental survey confirming market rent supports the loan. For STRs, we use platforms like AirDNA or actual booking history.
Step 4: Close in Your Name or Entity's. Typically 3–4 weeks from application. Close in personal name, LLC, trust, or business entity. Interest-only payment options available for cash flow optimization.
Key Benefits of DSCR Loans With AFC
No Tax Returns. Period. Your personal income, employment status, and tax filings are not part of the equation. The property's rental income is what qualifies the loan.
Close in an LLC for Liability Protection. Close directly in your LLC, LP, or corporation. Keep investment properties in the right legal structure from the start with no post-closing transfers.
Interest-Only Options to Maximize Cash Flow. Opt for interest-only payments during the first 5 or 10 years. This keeps your monthly obligation lower and puts more cash in your pocket from rental income.
Frequently Asked Questions
What DSCR ratio do I need to qualify?
Most programs want a DSCR of 1.0 or higher, meaning the property's rent covers the full mortgage payment. Some programs go as low as 0.75 DSCR with compensating factors like higher credit scores or larger down payments. We'll tell you exactly where your deal falls.
Can I use a DSCR loan for an Airbnb or short-term rental?
Yes. Many DSCR programs accept short-term rental income documented through AirDNA projections or actual booking history from platforms like Airbnb and VRBO. STR income can often support higher DSCR ratios than long-term rents, making these properties attractive candidates.
What's the minimum down payment for a DSCR loan?
Typically 20–25% down, depending on the property type, DSCR ratio, and your credit score. Stronger deals (higher DSCR, higher credit) may access programs with 15% down. We'll show you the options available for your specific scenario.
What Is a DSCR Loan?
DSCR stands for Debt Service Coverage Ratio — it compares a property’s rental income to its total mortgage payment. If the rent covers the mortgage, you qualify. No W-2s, no pay stubs, no tax returns. The property is the borrower.
This matters enormously to investors with complex finances — self-employed borrowers, business owners who write off aggressively, investors with ten or twenty properties. A conventional lender sees red flags. We see a performing asset.
Who Is a DSCR Loan Right For?
Portfolio Landlords
Experienced landlords scaling portfolios. No limit on properties financed. Qualify each deal on its own rental income.
Short-Term Rental Operators
Airbnb and VRBO operators. STR income documented through AirDNA or actual booking history can support higher DSCR ratios.
LLC & Entity Buyers
Close directly in your LLC, LP, or corporation for liability protection. No post-closing transfers required.
How DSCR Loans Work at AFC
Property Analysis. Send us the details and we calculate the DSCR ratio on the spot using actual market rents verified through appraisal.
Application and Credit Review. We pull credit (660+ minimum), collect entity documents if closing in an LLC. No tax returns, no income docs.
Appraisal and Rent Verification. The appraisal includes a rental survey confirming market rent supports the loan. For STRs, we use AirDNA or actual booking history.
Close in Your Name or Entity’s. Typically 3–4 weeks. Close in personal name, LLC, trust, or business entity. Interest-only options available.
Key Benefits of DSCR Loans With AFC
No Tax Returns. Period.
Your personal income, employment status, and tax filings are not part of the equation. The property’s rental income qualifies the loan.
Close in an LLC
Close directly in your LLC, LP, or corporation. Keep investment properties in the right legal structure from the start.
Interest-Only Options
Opt for interest-only payments during the first 5–10 years. Lower monthly obligation, more cash in your pocket from rental income.
Frequently Asked Questions
What DSCR ratio do I need?
Most programs want 1.0 or higher. Some go as low as 0.75 with compensating factors like higher credit or larger down payments.
Can I use DSCR for Airbnb or STRs?
Yes. Many programs accept STR income via AirDNA projections or actual booking history. STR income often supports higher DSCR ratios.
What’s the minimum down payment?
Typically 20–25% down. Stronger deals may access 15% down programs. We’ll show you the options for your specific scenario.
How is the DSCR ratio calculated?
DSCR is calculated by dividing the property's gross monthly rent by its total monthly debt obligations (principal, interest, taxes, insurance, and HOA if applicable). A DSCR of 1.25 means the property earns 25% more than it costs to carry. AFC calculates this for every property you are considering.
Can I qualify for a DSCR loan without rental history?
Yes. Lenders typically use a market rent appraisal (Form 1007) to determine projected rent for new acquisitions with no rent history. The appraiser estimates fair market rent for the property, which AFC uses to calculate DSCR for qualification.
What if my DSCR is below 1.0?
Some lenders accept DSCR below 1.0 (even down to 0.75) with a larger down payment — typically 30–35%. This is common in high-cost markets where rents do not fully cover carrying costs. AFC works with lenders who offer these programs for the right borrower profile.
Can I use a DSCR loan to refinance an existing investment property?
Yes. DSCR loans are available for both purchases and refinances, including cash-out refinances. Many investors use DSCR cash-out refis to pull equity from one property and fund the down payment on the next. AFC can run the numbers on whether a DSCR refi makes sense for your portfolio.
Are DSCR loans available for short-term rentals like Airbnb?
Yes. Some lenders accept short-term rental income using platforms like Airbnb and VRBO for DSCR qualification. They typically use 12 months of documented STR income or a market-rate estimate. AFC will identify which programs accept STR income for your specific property and market.
How many DSCR loans can I have at once?
Unlike conventional loans, DSCR lenders typically do not cap the number of financed properties. You can scale your portfolio as long as each property meets the DSCR threshold and you meet credit and reserve requirements. AFC works with investors who hold 10, 20, or more properties financed through DSCR programs.
See What Your Deal Qualifies For
Get real numbers in about 2 minutes — qualify on the property's rental income, not your tax returns. A real person from our team follows up with your DSCR options.