Loan Programs
A DSCR loan qualifies your rental property on its own cash flow — rent measured against PITIA — instead of your tax returns, W-2s, or debt-to-income ratio. If the property pays for itself, you can close, and you can close in an LLC.
Program at a glance
- Qualify on property rent ÷ PITIA. No tax returns, W-2s, or pay stubs.
- 1–4 unit residential, 5–8 unit multifamily, condos, and short-term rentals.
- Typical 20–25% down (75–80% LTV); cash-out generally caps at 70–75%.
- Close in an LLC, corporation, or partnership. No cap on financed properties.
- 10–21 days from clean title on a well-prepared file.
How DSCR underwriting actually works
Every conventional investment-property approval runs through your personal balance sheet. The lender adds up your income, subtracts every obligation you carry, and decides whether the new mortgage fits inside a debt-to-income ceiling. That process punishes the two things successful investors do most: writing off income aggressively, and owning a lot of property.
DSCR lending inverts it. The subject property is the borrower. We take the gross monthly rent the property produces or can produce, divide it by the full monthly obligation the loan creates, and read the resulting ratio:
A property renting for $3,000 against a $2,400 PITIA carries a 1.25 DSCR. It covers its debt with 25% to spare. A property renting for $2,300 against the same $2,400 payment sits at 0.96 — still financeable, but on a sub-1.0 program with different pricing and leverage.
Where your ratio lands
Run your own numbers on the DSCR calculator, or start from an address with the property analyzer on our home page — it pulls an estimated value and market rent so you can size a deal before you have a lease in hand.
What we finance
Single-family rentals
Turnkey, tenant-occupied, or vacant at purchase. The core of most buy-and-hold portfolios.
SFR program →Small multifamily
Duplex through fourplex on residential DSCR terms; 5–8 units on commercial-grade DSCR.
Multifamily program →Short-term rentals
Airbnb and VRBO properties underwritten on trailing platform revenue or a market projection.
STR program →Fix and flip
Acquisition plus 100% of renovation draws, with a clean exit into permanent DSCR financing.
Rehab program →Foreign national & ITIN
International investors qualified on assets and international credit references.
Foreign national program →Cash-out refinance
Recycle equity out of a stabilized asset into the next acquisition.
Cash-out program →DSCR versus a conventional investment loan
| Conventional investment | Padcents DSCR | |
|---|---|---|
| Qualifying basis | Personal debt-to-income | Property rent ÷ PITIA |
| Income documents | Tax returns, W-2s, pay stubs, 4506-C | None |
| Employment check | Verified at application and again before funding | Not required |
| Vesting | Individual name | LLC, corporation, LP, or personal name |
| Financed property cap | Typically 10 | No cap |
| Short-term rental income | Rarely usable | Usable with platform history or projection |
| Typical close | 45–60+ days | 10–21 days |
| Rate | Lower | Generally 0.50–1.50% higher |
The rate premium is real and we do not paper over it. What you buy with it is speed, entity flexibility, and the ability to keep buying after property number ten. For a full side-by-side on which product wins in which situation, see DSCR vs conventional.
What it takes to qualify
| Requirement | Floor | Where pricing gets good |
|---|---|---|
| Credit score | 620–660 | 720+ |
| DSCR | 0.75 (no-ratio available) | 1.25+ |
| Down payment, purchase | 20% | 25% |
| Reserves | 2 months PITIA | 6 months |
| Property condition | Habitable, C4 or better | C1–C3 |
Full detail — credit tiers, LTV by purpose, reserve sources, seasoning, entity rules, and the ten most common reasons a DSCR file dies — lives on DSCR loan requirements.
From term sheet to funding
- Send the deal, not a life storyAddress, purchase price or estimated value, current or projected rent, and your rough credit band. That is enough to price it.
- Term sheet within 24 hoursYou get structures, not a single take-it-or-leave-it quote — typically a maximum-leverage option and a best-pricing option so you can choose.
- Appraisal and rent schedule orderedForm 1004 plus 1007 on a single unit, or Form 1025 on 2–4 units. This is the step that most often moves the final number.
- Entity and insurance clearedOperating agreement, EIN letter, certificate of good standing, and a binder naming the lender as mortgagee.
- Clear title and closeRemote or in-person signing. Ten to twenty-one days is normal on a clean file.
The document list is short but unforgiving about completeness. Work through the process and document checklist before you submit and you will save a week.
Where DSCR is the wrong tool
Honest limits, because a loan that should not have closed is worse for you than one that never did:
- You plan to live in it. DSCR is a business-purpose loan on non-owner-occupied property. Occupying it is a breach of the note.
- The property is not habitable. A C5 or C6 appraisal rating kills a DSCR file. That deal needs rehab financing first.
- You will sell inside the prepayment window. Most DSCR notes carry a 3–5 year step-down penalty. If the plan is to flip, price a bridge loan instead.
- You qualify comfortably on conventional and own fewer than ten. Take the cheaper rate.
Price your deal
Send the address, the price, and the rent. We will come back with real structures inside a business day — no credit pull to get a term sheet.
Get a term sheet Call (914) 266-0725Common questions
Do DSCR loans require tax returns?
No. No 1040s, no W-2s, no pay stubs, no profit and loss statements, and no 4506-C transcript request. The lender underwrites the property's rent against its PITIA, plus your credit and reserves.
What is the minimum DSCR you will accept?
Standard programs start at 1.00. Sub-1.0 programs cover roughly 0.75 to 0.99 with a rate adjustment and lower leverage. No-ratio programs waive the calculation entirely for stronger borrower profiles.
Can I close in an LLC?
Yes, and most of our clients do. You will need articles of organization, a fully executed operating agreement with all amendments, an EIN letter, and a certificate of good standing dated within 60 days. Members owning 20% or more typically sign a personal guarantee.
How many DSCR loans can I have?
There is no program cap on financed properties. Individual lenders set exposure limits per borrower, which is a reason to spread a large portfolio across more than one capital source — something we structure for directly.
How is rent determined if the property is vacant?
The appraiser's comparable rent schedule (Form 1007) establishes market rent from at least three rental comparables. On a tenant-occupied property with a lease below that market rent, most lenders use the lower of the two figures.
Are DSCR rates higher than conventional?
Generally yes, by roughly half a point to a point and a half, though the gap narrows once Fannie Mae and Freddie Mac loan-level price adjustments for investment property are applied to the conventional side. On some files the all-in cost is close to a wash.
DSCR loans are business-purpose loans secured by non-owner-occupied investment property. Not for consumer or primary-residence use. Rates, leverage, and eligibility vary by lender, state, and borrower profile, and change frequently. Nothing on this page is a loan commitment or an offer to lend.