DSCR Loan Guide: No Income Mortgage Loan for Multi-Unit Rental Properties
Investing in multi-unit rental properties can be a lucrative strategy for generating passive income, but securing financing can be a major hurdle—especially for borrowers who don’t have traditional income documentation. This is where Debt Service Coverage Ratio (DSCR) loans come in. These no-income verification loans allow real estate investors to qualify for financing based on their property’s rental income rather than personal income.
In this guide, we’ll break down everything you need to know about DSCR loans for multi-unit rental properties, including:
✅ What DSCR Loans Are & How They Work
✅ Who Qualifies for a DSCR Loan
✅ Key Benefits of No-Income DSCR Loans
✅ DSCR Loan Requirements & Terms
✅ Step-by-Step Process to Secure a DSCR Loan
✅ Where to Find DSCR Loan Lenders
By the end of this guide, you’ll have a clear roadmap for using a DSCR loan to finance your next multi-unit rental property—without the hassle of proving personal income.
What Is a DSCR Loan?
A Debt Service Coverage Ratio (DSCR) loan is a no-income mortgage designed for real estate investors. Instead of using personal income (W-2s, tax returns, or pay stubs), lenders determine eligibility based on the property’s rental income compared to the debt obligations.
How DSCR Works
Lenders use the Debt Service Coverage Ratio (DSCR) formula to assess a property’s ability to cover its mortgage payments:
[
DSCR = \frac{\text{Gross Rental Income}}{\text{Monthly Debt Obligations (PITI)}}
]
- A DSCR of 1.0 means the property breaks even (rental income = mortgage payment).
- A DSCR above 1.0 means the property generates positive cash flow.
- A DSCR below 1.0 means the property does not generate enough income to cover the mortgage.
Most DSCR lenders require a minimum ratio of 1.0 to 1.25, but some offer No-Ratio DSCR Loans, which means they don’t require a minimum DSCR.
Who Qualifies for a DSCR Loan?
DSCR loans are ideal for:
✔ Real estate investors with multiple rental properties
✔ Self-employed borrowers with complex tax returns
✔ Foreign investors with no U.S. income history
✔ Retirees investing in rental properties
✔ House flippers & Airbnb hosts looking for easy financing
Unlike traditional mortgages, DSCR loans allow investors to qualify based on rental income alone, making them an excellent option for those who may have high expenses, tax write-offs, or variable income.
Key Benefits of DSCR No-Income Mortgage Loans
✅ No Income Verification Required
You don’t need tax returns, W-2s, pay stubs, or employment verification to qualify.
✅ Fast & Streamlined Approval Process
DSCR loans close much faster than conventional loans, often within 2 to 4 weeks.
✅ Ideal for Multi-Unit Properties
DSCR loans work well for duplexes, triplexes, fourplexes, and large apartment buildings.
✅ Use for Airbnb & Short-Term Rentals
Many DSCR lenders allow vacation rentals, Airbnbs, and short-term rental income to qualify.
✅ Finance LLC-Owned Properties
Unlike traditional loans, DSCR lenders allow purchasing or refinancing under an LLC for asset protection.
✅ Flexible Property Types
DSCR loans can finance:
✔ Single-family rentals (SFRs)
✔ Multi-unit buildings (2-4 units, 5+ units)
✔ Mixed-use properties
✔ Airbnbs & short-term rentals
✔ Condos & townhomes
✅ No Limits on the Number of Mortgages
Traditional loans limit the number of financed properties (often 10). DSCR loans allow unlimited rental properties.
DSCR Loan Requirements & Terms
Lenders offering DSCR loans each have different requirements, but here’s what to expect:
1. Credit Score Requirements
- Minimum credit score: 680+
- Some lenders may accept 620+ with higher rates
2. Loan-to-Value (LTV) Limits
- Purchase: Up to 80% LTV
- Refinance: Up to 75% LTV
- Cash-Out Refinance: 65-70% LTV
3. DSCR Ratio Requirements
- Typical minimum DSCR: 1.0 – 1.25
- No-Ratio DSCR Loans available (ideal for properties not yet generating rental income)
4. Loan Amounts
- Minimum: $100,000
- Maximum: $5M+ (depends on lender)
5. Loan Terms
- Interest Rates: Typically prime + 1-2%
- Fixed & Adjustable-Rate Options available (5/1 ARM, 30-year fixed, etc.)
- Prepayment Penalties May Apply (Check lender terms)
6. Property Appraisals
- Desktop or Full Appraisal Required
- Rent schedule (Form 1007) may be needed to estimate rental income
7. Down Payment Requirements
- Typically 20-25% down for purchases
- Lower down payments may be available for strong borrowers
How to Get a DSCR Loan for Multi-Unit Rental Properties
If you’re interested in securing a DSCR no-income loan, follow these steps:
Step 1: Check Your Credit Score
Ensure you meet the minimum credit score requirement (typically 680+).
Step 2: Estimate Your DSCR Ratio
Use this formula:
[
\text{DSCR} = \frac{\text{Monthly Gross Rent}}{\text{Monthly Mortgage Payment (PITI)}}
]
If your DSCR is 1.0 or higher, you’ll likely qualify. If below 1.0, look for a No-Ratio DSCR loan.
Step 3: Gather Property Information
Lenders will ask for:
✔ Property address & type
✔ Lease agreements (if applicable)
✔ Current rent roll or rental income estimate
Step 4: Apply with a DSCR Lender
Since banks don’t offer DSCR loans, work with a private lender, mortgage broker, or direct non-QM lender specializing in investor loans.
Step 5: Get an Appraisal & Approval
Lenders will order an appraisal and rent schedule to confirm property value and rental income.
Step 6: Close & Fund Your Loan
Once approved, DSCR loans fund within 2 to 4 weeks—much faster than conventional loans.
Where to Find DSCR Loan Lenders
Since traditional banks don’t offer DSCR loans, you’ll need to work with:
✔ Direct private lenders
✔ Mortgage brokers specializing in investor financing
✔ Hard money lenders (short-term DSCR options)
✔ Online non-QM mortgage lenders
Final Thoughts: Is a DSCR Loan Right for You?
If you’re a real estate investor looking for a simple, fast, and no-income verification mortgage, a DSCR loan can be an excellent solution. These loans allow you to qualify based on rental income, making them ideal for multi-unit rental property investors who prefer hassle-free financing.
🚀 Looking to finance your next rental property? Start exploring DSCR loan options today! 🚀
Fast and Flexible Financing: How GHC Funding Closes Transactions in as Little as 2 Weeks
When it comes to securing funding for rental property investments, speed can make all the difference. Whether you’re competing for a hot property or need to move quickly to capitalize on an opportunity, slow and cumbersome loan processes can cost you valuable time and even your chance to secure the deal. That’s where GHC Funding comes in, offering quick closings that can be completed in as little as 2 weeks.
The Need for Speed in Real Estate Investing
In today’s fast-paced real estate market, timing is critical. Rental property investors often face stiff competition, and sellers prefer buyers who can close the deal quickly and with minimal hassle. Traditional lending institutions, while reliable, often take weeks or even months to process small loans for rental properties. The delays can result in missed opportunities or even the loss of a potential investment.
GHC Funding understands these challenges and has designed its lending process to prioritize speed and efficiency. With a streamlined approach, GHC Funding empowers investors to act quickly, secure their properties, and move forward with confidence.
How GHC Funding Makes Quick Closings Possible
- Streamlined Application Process
GHC Funding has simplified its application process to eliminate unnecessary paperwork and delays. Investors can quickly submit their loan requests and receive an initial decision in a matter of days. - Specialized Focus on Small Loans for Rental Properties
Unlike traditional lenders, GHC Funding specializes in providing tailored solutions for small loans specifically designed for rental property investments. This specialization allows for faster underwriting and decision-making. - Expert Team of Professionals
The experienced team at GHC Funding knows the ins and outs of real estate financing. Their expertise enables them to evaluate applications efficiently and provide quick approvals without sacrificing due diligence. - Commitment to Fast Closings
GHC Funding’s commitment to closing transactions in as little as 2 weeks sets it apart. This rapid turnaround time helps investors stay competitive in the market and avoids the delays that often accompany traditional lending.
The Benefits of Quick Closings for Rental Property Investors
- Win Competitive Bids: Quick closings make you a more attractive buyer, increasing your chances of winning bids in competitive markets.
- Secure Better Deals: Sellers are more likely to negotiate favorable terms with buyers who can close quickly.
- Save Time and Reduce Stress: A faster process means less time worrying about financing and more time focusing on growing your real estate portfolio.
Why Choose GHC Funding?
GHC Funding is more than just a lender—it’s a partner in your real estate investment journey. With its fast and flexible financing options, GHC Funding is committed to helping rental property investors succeed. Whether you’re a seasoned investor looking to expand your portfolio or a first-time buyer ready to make your move, GHC Funding’s quick closing process ensures you won’t miss a beat.
Ready to Get Started?
Don’t let slow loan processes stand in the way of your real estate goals. With GHC Funding, you can secure the financing you need in as little as 2 weeks. Contact us today to learn more about our small loan solutions for rental properties and discover how we can help you achieve your investment dreams—quickly and efficiently.
Act fast. Close fast. Invest with confidence. Choose GHC Funding.
