Loan Programs
A no-ratio DSCR loan skips the coverage calculation entirely. The lender does not require the rent to cover the payment. In exchange, the borrower profile tightens considerably — this is a program that trades property strength for borrower strength.
No-ratio terms
- DSCR not calculated — no minimum ratio
- 680+ FICO typical, 700+ at many lenders
- 70% maximum LTV
- 12 months of PITIA in reserves
- Rate premium of roughly +50 to +100 bps over a 1.00 DSCR file
Who this program is for
- Vacant property at purchase in a market where the Form 1007 will not produce a supporting rent, or where you intend a different use than the appraiser's comparables reflect.
- High-cost markets where nothing pencils. Coastal California, the New York metro, Seattle, and parts of Miami routinely produce ratios in the 0.6 to 0.8 range at market rates. If the thesis is appreciation and you have the reserves to carry a negative, no-ratio is the honest structure for it.
- Properties between uses — a building coming out of one tenancy and into a repositioning, where neither the old rent nor the new one describes the asset.
- Second homes intended for occasional personal use alongside rental — though note this creates occupancy questions that must be resolved honestly with the lender.
What it actually costs
| 1.25 DSCR file | No-ratio file | |
|---|---|---|
| Rate | Baseline | +50 to +100 bps |
| Max LTV | 80% | 70% |
| Down payment on $500K | $100,000 | $150,000 |
| Reserves | 2–3 months | 12 months |
| FICO floor | 620 | 680–700 |
On a $500,000 property, the difference between those two columns is $50,000 more down payment and roughly $30,000 more in required reserves — $80,000 of additional capital committed before the rate premium is counted. That is the real price of the program, and it is why no-ratio is a tool for capital-rich investors rather than a workaround for a thin file.
No-ratio versus sub-1.0
These get conflated and they are different products. A sub-1.0 program still calculates the ratio and requires it to land in a defined band, usually 0.75 to 0.99, at a rate adjustment of roughly 37.5 to 75 basis points with 70–75% LTV. A no-ratio program does not calculate it at all.
If your deal lands at 0.85, take the sub-1.0 program — the pricing is better and the leverage is higher. No-ratio earns its place when the ratio is genuinely unmeasurable or so far below the band that no program will accept it.
Before you choose it
Three cheaper alternatives are worth exhausting first:
- More down payment. Reducing the loan is the most direct route to a passing ratio, and no-ratio already demands 30% down — you may be closer to a qualifying standard-program file than you think.
- Interest-only or 40-year amortization. Either can lift a ratio 0.10 to 0.20 at a fraction of the no-ratio premium.
- A different property. Sometimes the honest read is that the deal does not work, and the program that will fund it anyway is not doing you a favour.
Find out which program your deal needs
Send the numbers. If a standard or sub-1.0 program will take it, we will tell you — those price better.
Get a term sheet Check your ratioBusiness-purpose loans on non-owner-occupied investment property. A property that does not cover its debt service requires ongoing capital from the borrower; consider that exposure carefully. Not a loan commitment.