Financing

DSCR Loan

A rental mortgage underwritten based on the property’s cash flow, not the borrower’s personal income.

Definition

DSCR stands for Debt Service Coverage Ratio. A DSCR loan is a rental mortgage where the lender underwrites based on the property's rent covering the mortgage payment (DSCR ≥ 1.0 or 1.2) rather than the borrower's W2 income. Rates are typically 1-2 points above conventional. DSCR loans are the standard exit for BRRRR investors and the standard financing for buy-and-hold landlords buying through LLCs.

Related terms

BRRRR

Buy, Rehab, Rent, Refinance, Repeat — a rental-acquisition strategy using short-term debt …

Hard Money Loan

Short-term real estate financing from a private lender, based on the value of the asset ra…

Put this to work on a real deal

Browse off-market wholesale properties in Central Maryland and underwrite with our free tools.

Browse Deals ARV Calculator