Investment property loans › DSCR loans
DSCR Loans
The rent pays the mortgage. So why is the bank reading your tax returns?A bank gives you an answer. As your loan broker, I give you options.
You have a rental that pays for itself, or one under contract that will. Then the bank asks for two years of tax returns, counts your write-offs against you and says you do not earn enough.
I’m Kevin Kermeen, and I place DSCR loans for investors who want the property judged on what it earns. A DSCR mortgage is built around the debt service coverage ratio: the rent compared to the full payment. One application puts your file in front of the right capital partners from my network of 200+, for a purchase, a rate and term refinance or a DSCR cash-out refinance. DON’T beg the bank!
7 days a week (Arizona Time)
- 200+capital partners
- $150,000program minimum
- Buy or refiincluding cash-out
- 3 to 5 daysfor term sheets
How DSCR Loans Work
DSCR loans flip the usual question. Instead of asking what you earn, the first question is what the property earns.
What the debt service coverage ratio measures
The debt service coverage ratio compares the monthly rent to the full monthly payment: principal, interest, property taxes, insurance and any HOA dues. A ratio of 1.0 means the rent exactly covers the payment. Above 1.0, the property carries itself with room to spare. Each capital partner sets its own minimum.
What it can replace
Many DSCR loans lean on the rent instead of building the approval on your personal income. Your credit, your cash reserves and the property itself still matter, and some partners still ask for more documents. I tell you at the start which kind of file yours is.
Buy, refinance or DSCR cash-out refinance
Single-family rentals, duplexes, triplexes and fourplexes, condos and townhomes, and in some programs short-term rentals. Use it to buy, to replace an existing loan with a rate and term refinance, or to pull equity out with a DSCR cash-out refinance.
Where DSCR loans fit best
Long-term holds that are rented or ready to rent. If the property needs a heavy rehab first, a fix and flip loan or a BRRRR loan usually comes first, and the DSCR mortgage comes after the work is done.
On This Page
DSCR Loans Stories You Might Be Living
Every investor who calls me about DSCR loans has lived a version of one of these. If yours sounds familiar, the deal may not be the problem. The lender might be.
SELF-EMPLOYED
Your tax return says you barely made a living
You run a business and your accountant does a great job. That is the problem. Every legitimate write-off that lowers your tax bill also lowers the income a bank will count, so the rental that clearly pays for itself gets declined because of one line on page one of your return.
What changes when you bring it to me: With DSCR loans, the conversation starts with the property. If the rent covers the full payment, many of my capital partners can build the approval around the debt service coverage ratio, your credit and your reserves, not your adjusted gross income.
GROWING PORTFOLIO
The bank says you already own enough rentals
You have done this before and it works. The rents come in, the properties are full, the payments are on time. Then the loan officer tells you the bank is done with you, not because your rentals are failing, but because you have too many of them.
What changes when you bring it to me: Each DSCR mortgage is judged on its own property. I match your next rental to capital partners whose guidelines fit a growing portfolio, and if you would rather group several rentals under one loan, I will show you buy and hold loans side by side.
TRAPPED EQUITY
Your equity is sitting still while the next deal goes to someone else
The rental has gone up in value and the rent went up with it. You can see the next property, you know the street and you know the numbers. But the cash you need is locked inside the house you already own, and the bank wants a story you cannot tell in its language.
What changes when you bring it to me: A DSCR cash-out refinance can turn some of that equity into cash for the next purchase, sized on today’s value and the rent the property produces now. I show you what the numbers support before you commit to anything, so there are no surprises at the closing table.
☂️ Banks hand out umbrellas when the sun is shining, not when you are weathering the storm.
7 days a week (Arizona Time)
Is a DSCR Mortgage the Right Fit?
DSCR loans fit when
- The property is rented, or ready to rent at market rent
- The rent covers, or comes close to covering, the full payment
- You want a long-term hold, not a quick resale
- Your tax returns understate what you really earn
- You own, or want to own, the property in an LLC
Look at another program when
- The property needs a major rehab: see fix and flip loans or BRRRR loans
- You want several rentals under one loan: see buy and hold loans
- You are behind on the current note: see the investment property foreclosure bailout
- It is a larger apartment or commercial building: see commercial real estate loans
- You plan to live in it yourself
How DSCR Loans Work With Me
One conversation, one application and a broker who stays on your file until it closes.
- You call or apply. Call Kevin 7 days a week (Arizona Time) at (480) 915-8690, or start the DSCR application. Estimates are fine. Tell me the rent, the payment you expect and what worries you.
- I check the ratio. I compare the rent, or the expected market rent, to the full payment and tell you straight whether the deal works as one of my DSCR loans, or what would make it work.
- I match the file. I take one complete file to the capital partners from my 200+ network whose guidelines fit your property, your credit and your plan. You do not apply over and over.
- You compare term sheets. 3 to 5 days
Expect term sheets in 3 to 5 days. I walk you through each one in plain English: payment, costs, prepayment terms and conditions. - Appraisal and rent schedule. The appraisal usually includes a market rent analysis that confirms what the property earns or can earn. I keep the file moving and you informed.
- You close and move on. Days, not months
Investor loans like these close in days, not months, and some loans are approved and funded in 24 to 72 hours on select programs. Then you get back to the next property.
7 days a week (Arizona Time)
What You Will Need for a DSCR Mortgage
Have these ready and your file can go to the right capital partners without anyone asking you twice. Missing something? Apply anyway and upload the rest later.
Every DSCR file
- Property address, type and number of units
- Purchase contract if you are buying, or a mortgage statement if you are refinancing
- Property photos
- LLC or corporation documents, if you own through an entity
- Last two months of bank statements for cash to close and reserves
- A credit report with scores, and a government ID
- A personal financial statement and a schedule of real estate you own
The property income
- Rent roll and current leases, or the expected market rent
- Annual property taxes, insurance and any HOA dues
- 12 months of income and expenses on a rental refinance
- For a DSCR cash-out refinance: the amount you want and what it is for
- For a short-term rental: the revenue history, if the program allows it
DSCR loans are for investment property only. If you or a family member will live in the property, it is not a DSCR file, and I will point you in a better direction.
What Capital Partners Look At on DSCR Loans
Every capital partner has its own box, but most ask the same questions about a rental. Knowing them before you apply saves time and surprises.
- The ratio: whether the rent covers the full payment, and by how much
- Credit: your scores, and some partners have minimums while others weigh the file as a whole
- Reserves: cash left after closing to cover months of payments
- Your cash in the deal: the down payment or the equity on a refinance
- Experience: first-time landlords fit some programs, and a track record opens more
- Title: some partners lend only to an LLC or corporation
- Location: many partners lend only in certain states or markets
- The property: type, condition, units and whether it is long-term or short-term rental
A weak spot does not end the deal. It changes which capital partners fit, which is why I review every file before it goes out. For independent context, see the U.S. Census Bureau Housing Vacancies and Homeownership survey and IRS Publication 527 on residential rental property.
Check your debt service coverage ratio first
Plug in the rent, the payment, taxes and insurance and see the ratio and your cash flow. Bring the result when you call me.
Recently Funded DSCR Loans
Real investor deals from my desk. Every deal is different, and yours starts with a conversation.
Why Investors Use a Broker for DSCR Loans
A bank gives you an answer. As your loan broker, I give you options.
A bank can only offer its own loan, inside its own box. I am a nationwide commercial loan broker, and I work for you, not the lender. My job is to know which capital partners are writing DSCR loans for which properties right now, and to present your rental so it gets a fair look. DON’T beg the bank!
“Bring me the rental the bank would not hear. I will tell you what the ratio supports, what it will take and which of the 200+ capital partners I work with is the right fit.”
A fit if you
- Need $150,000 or more for a rental
- Have a property or a signed contract
- Can share the rent and your documents
- Want options, not one take-it-or-leave-it offer
Not a fit if you
- Need less than $150,000
- Plan to live in the property
- Want a promise of approval before anyone sees the file
- Are not ready to share documents
Other Investor Programs
Every strategy needs a different loan. See all six on my investment property loans page, or jump to the one that fits.
Buy and Hold Loans
Best for: Long-term rentals, one or several under one loan
Investment Property Foreclosure Bailout
Best for: Behind on an investment property note
Duplex, Triplex and Fourplex Loans
Best for: Buying or refinancing a duplex, triplex or fourplex
Bigger building? See my multi-family apartment loans and bridge loans.
7 days a week (Arizona Time)
DSCR Loans FAQ
What are DSCR loans?
DSCR loans are investment property loans built around the debt service coverage ratio, which compares a rental property’s income to its full payment. Many programs lean on the rent instead of your personal income, while your credit, reserves and the property still matter.
How is the debt service coverage ratio calculated?
Divide the monthly rent by the full monthly payment, including principal, interest, property taxes, insurance and any HOA dues. A result of 1.0 means the rent equals the payment. Each capital partner sets its own minimum, and I will tell you which partners fit your ratio.
Do DSCR loans need my tax returns?
It depends on the program and the capital partner. Many programs lean on the rent instead of your returns, while some partners still ask for them. I match your file to the partners whose documentation rules fit you.
Can I do a DSCR cash-out refinance?
Often, yes. A DSCR cash-out refinance is sized on the property’s current value and rent, your credit and your reserves. I will show you what the numbers support before you commit.
Can a DSCR mortgage cover a short-term rental?
Some programs allow it, using the property’s documented short-term revenue or a market rent estimate. Bring the revenue history and I will match it to partners that lend on short-term rentals.
What is the minimum loan amount?
My DSCR loans start at $150,000. For a smaller deal, call Kevin (480) 915-8690 to discuss your situation, and I will tell you honestly whether I can help.
Can I close in an LLC?
Yes. Many capital partners prefer an entity, and some lend only to an LLC or corporation. Have your entity documents ready when you apply.
How long do DSCR loans take?
Expect term sheets in 3 to 5 days. Loans like these close in days, not months, and some loans are approved and funded in 24 to 72 hours on select programs. The appraisal, title and how quickly documents come in set the pace.
Is approval certain if I apply?
No. Every file is subject to credit approval, and rates and terms depend on the property, the rent and your file. What I promise is a personal review and a straight answer.
Ready to Talk About Your DSCR Loans?
A bank gives you an answer. As your loan broker, I give you options.
Tell me about the rental the bank would not hear. Purchase, refinance or cash-out, I review every DSCR file personally and give you a straight answer. DON’T beg the bank!
☂️ Banks hand out umbrellas when the sun is shining, not when you are weathering the storm.
7 days a week (Arizona Time)
Subject to credit approval. Terms vary. This is not a commitment to lend. DSCR loans are for non-owner-occupied investment property only.