A DSCR (Debt Service Coverage Ratio) loan is a type of mortgage for investment properties that is qualified primarily based on the property's rental income rather than the borrower's personal income. With a DSCR loan, lenders look at whether the property's rental income is sufficient to cover the mortgage payment (principal, interest, taxes, insurance, and sometimes association dues). If the rental income meets or exceeds the required coverage ratio, the borrower can qualify without providing traditional income documentation such as tax returns, W-2s, or employment verification. This makes DSCR loans popular with real estate investors who may have complex or non-traditional income sources but own or are purchasing properties that generate strong rental income.

What credit score do I need for a DSCR loan?

Most DSCR lenders require a minimum credit score of 620–680. At TQ Lending, the minimum is 640, with 680+ recommended for the best rates and terms. Credit score is the single biggest factor in your rate pricing — every 20-point improvement can meaningfully reduce your cost.

How much down payment do I need for a DSCR loan?

Minimum down payment is typically 15%–25%, depending on your credit score, the DSCR ratio, and the property type. A 20% down payment with a 1.25+ DSCR and 700+ credit score is the most common scenario.

Can I get a DSCR loan with no rental history on the property?

Yes. For vacant properties or new purchases without an existing tenant, the appraiser provides a Fair Market Rent estimate based on comparable rentals in the area. You don't need a lease in place to qualify.

Can I use a DSCR loan for a short-term rental or Airbnb?

Yes. Many DSCR lenders, including TQ Lending, have specific programs for short-term rental properties that use projected STR revenue rather than traditional long-term lease income.

Can I close a DSCR loan in my LLC?

Yes. DSCR loans are specifically designed for entity-based investing. You can close in an LLC, corporation, or trust. The investment property debt stays off your personal credit report.

How fast can I close a DSCR loan?

DSCR loans typically close in 15–25 days. At TQ Lending, our fastest closings are 15 days. The streamlined documentation requirements eliminate many of the bottlenecks that slow down conventional loans, helping you close faster.

Is there a limit to how many DSCR loans I can have?

No. Unlike conventional loans, which cap at 10 financed properties, DSCR loans have no portfolio limit. Each property is evaluated on its own merits.

What is the minimum loan amount for a DSCR loan?

At TQ Lending, the minimum DSCR loan amount is $250,000. Our average DSCR loan size is approximately $500,000.

Do DSCR loans have prepayment penalties?

Most DSCR loans do include a prepayment penalty, usually on a declining schedule such as 5-4-3-2-1 or 3-2-1 (representing the percentage penalty in each year). No-prepayment-penalty options are sometimes available, but they typically come with a higher interest rate.

What states does TQ Lending operate in?

TQ Lending is licensed in 46+ states. Our priority markets, where we have the deepest expertise, are Texas, Florida, Georgia, Tennessee, Virginia, North Carolina, and South Carolina.

Is TQ Lending a direct lender or a broker?

TQ Lending is a direct lender. We fund loans with our own capital — no broker middlemen, and no waiting for a wholesale lender to make a decision.

What does "flat-fee pricing" mean?

Flat-fee pricing means you pay one set, all‑in fee for your loan instead of a mix of changing origination charges and extra “junk” fees like processing, underwriting, or document preparation. With TQ Lending, this single flat fee is disclosed upfront, so you know the total cost of the loan before you commit and won’t be surprised by additional charges at closing.

Do I need to verify my income for any TQ Lending products?

For DSCR loans, no personal income verification is required. For bank statement loan programs, you provide 12–24 months of bank statements instead of tax returns.

Can foreign nationals get investment property loans?

Yes. TQ Lending offers foreign national loan programs. No SSN is required. Qualification is based on the property's DSCR and the borrower's credit profile.

DSCR Loans: The Complete Guide for Real Estate Investors

Qualify on rental income, not your W-2. No tax returns. No income verification. If the property cash-flows, you qualify.

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You found a rental property that cash-flows. The numbers work. You're ready to move. But your lender wants two years of tax returns, W-2s, pay stubs, and a letter from your employer explaining why you took a Tuesday off in 2024.

That's not how investors buy properties.

A DSCR loan qualifies you based on the property's rental income — not your personal income, not your tax returns, not your employment history. If the property makes enough money to cover the mortgage payment, you can get the loan.

This guide covers everything you need to know about DSCR loans: how they work, who qualifies, what they cost, and when they make sense for your investment strategy. We've funded over $1 billion in investor loans at TQ Lending, and DSCR is our most popular product — because it's the loan that was actually designed for how investors operate.

What Is a DSCR Loan?

DSCR stands for Debt Service Coverage Ratio. It's a number that compares the income a property generates to the debt payments on that property.

The formula is straightforward:

DSCR = Gross Rental Income / Total Debt Payments (PITIA)

PITIA stands for Principal, Interest, Taxes, Insurance, and Association dues — the full monthly carrying cost of the property.

If a rental property generates $2,500 per month in rent and the total monthly mortgage payment (including taxes, insurance, and HOA) is $2,000, the DSCR is:

$2,500 / $2,000 = 1.25 DSCR

A DSCR of 1.25 means the property earns 25% more than the mortgage costs. The property pays for itself with room to spare.

Why DSCR Matters to Investors

Traditional mortgage qualification looks at you — your income, your employment, your debt-to-income ratio. That model was designed for homeowners buying a primary residence with a W-2 job.

It falls apart for investors.

If you own eight rental properties, a conventional lender sees eight mortgage payments dragging down your DTI — even if every property cash-flows. If you're self-employed and write off depreciation and business expenses, your tax returns show low income even though you're building wealth. If you just left your W-2 to invest full-time, you have no employment to verify.

DSCR lending sidesteps all of that. The question isn't "how much do you earn?" The question is "does this property make money?"