DSCR Loans

DSCR Loans: The Smart Choice for Rental Investors

February 10, 2026
David Williams
7 min read

Debt Service Coverage Ratio (DSCR) loans have become one of the most popular financing options for rental property investors. Unlike traditional loans that rely heavily on personal income, DSCR loans focus on the property's ability to generate income. Here's why they might be the perfect financing solution for your rental portfolio.

What is a DSCR Loan?

A DSCR loan evaluates properties based on their cash flow rather than the borrower's personal income or tax returns. The Debt Service Coverage Ratio measures the property's net operating income (NOI) against its debt obligations. A higher DSCR indicates the property generates more than enough income to cover its mortgage payments.

DSCR Formula

DSCR = Net Operating Income / Annual Debt Service

Most lenders require a DSCR of 1.0 or higher, with 1.25+ being preferred for stronger approval odds.

Benefits of DSCR Loans

  • No Income Verification: Qualify based on property cash flow, not personal W-2s or tax returns.
  • Multiple Properties: Finance an unlimited number of rental properties under one loan program.
  • Flexible Terms: Choose from 30-year fixed rates to ARMs and interest-only options.
  • Cash-Out Refinance: Pull equity from existing properties to fund new investments.

DSCR Loan Requirements in 2026

Typical Requirements

  • • Minimum DSCR: 1.0 (1.25+ preferred)
  • • Credit Score: 620+
  • • Down Payment: 20-25%
  • • Property Types: 1-4 units

Interest Rates

  • • 30-Year Fixed: 6.5% - 7.5%
  • • 5/1 ARM: 5.75% - 6.75%
  • • Interest-Only: 6.0% - 7.0%
  • • Points: 0-2%

Building Your Portfolio with DSCR Loans

DSCR loans are ideal for investors looking to scale their rental portfolios quickly. By focusing on property cash flow rather than personal income, you can acquire multiple properties in a shorter time frame. Many successful investors use DSCR loans to build portfolios of 10+ rental properties within just a few years.

Ready to Expand Your Rental Portfolio?

Oasis Capital Ventures helps investors secure DSCR financing with competitive rates and flexible terms. Get pre-approved today!

Apply for DSCR Loan