🏡 What Is a DSCR Loan? A Simple Guide for Real Estate Investors

Financing a rental property can feel tricky if you’re self‑employed or don’t have W‑2 income to show. A DSCR (Debt Service Coverage Ratio) loan focuses on the property’s income instead of your paycheck—and that can open doors.

💡 What Is DSCR?

  • DSCR is simply the ratio of your property’s rent to your mortgage payment (including taxes and insurance).

  • Ideal Ratio: You want at least $1 of rent for every $1 of payment (a DSCR of 1.0).

This means the property’s income can cover your loan—even if your personal income fluctuates.

✅ Why Investors Love DSCR Loans

  1. Focus on Cash Flow, Not Your Job
    Lenders look at rent, not your W‑2s or tax returns—perfect for freelancers and small‑business owners.

  2. Easier Paperwork
    Instead of digging up years of tax docs, you show a lease agreement or rental‑income schedule.

  3. Flexible Borrowing
    You can finance properties with just enough rent to cover the payment—no massive reserves needed.

📋 Basic DSCR Loan Checklist

  1. Estimate Your Rent
    Use your lease or market data to project monthly rent.

  2. Compare to Your Payment
    Include estimated principal, interest, taxes, and insurance. Aim for rent ≥ payment.

  3. Gather Simple Docs
    • Lease agreement / rental‑income form
    • Proof of property taxes and insurance quotes
    • Basic personal ID and bank statements

  4. Talk to a DSCR Specialist
    A broker who knows these loans can walk you through the details and find the right program.

📞 Ready to Finance Your Next Rental?

At Parish Lending, I make DSCR loans easy and clear—no overwhelm, just straightforward guidance. Whether you’re buying your first duplex or adding another property to your portfolio, I’ll help you:

  • Understand if DSCR is right for you

  • Rough‑in your numbers so you know what to expect

  • Gather the simple documents you need