Mortgage Glossary
DSCR (Debt-Service Coverage Ratio)
A measure of whether a rental property's income covers its debt — used to qualify investor loans.
Debt-Service Coverage Ratio (DSCR) compares a rental property's income to its monthly debt obligation (principal, interest, taxes, insurance, and HOA).
A DSCR of 1.0 means the property's rent exactly covers the payment. Above 1.0 means positive cash flow; many lenders look for 1.0–1.25 or higher.
DSCR loans qualify investors based on the property's cash flow rather than personal income — no tax returns or pay stubs required.
Frequently asked
What DSCR do I need to qualify?
Many DSCR programs accept ratios of 1.0 or higher, and some allow ratios below 1.0 with stronger down payments.
Do DSCR loans require income documentation?
No — DSCR loans qualify on the property's rental income, not your personal tax returns or pay stubs.