DSCR loans have become the default financing tool for rental investors who don't want their personal income standing between them and a deal. Instead of pulling tax returns, pay stubs, and W-2s, the lender underwrites the property: if the rent covers the debt, the loan works. That single shift is why self-employed investors, full-time landlords, and anyone scaling a portfolio gravitate toward this product.
But "no income verification" doesn't mean "no requirements." A DSCR loan still has clear qualification standards — a minimum coverage ratio, a credit threshold, a down payment, cash reserves, and an eligible property. Knowing those DSCR loan requirements before you apply is the difference between a clean two-hour term sheet and a deal that stalls in underwriting.
This guide lays out exactly what you need to qualify in 2026 — the numbers, the documents, and the property rules — so you can walk into your next purchase or refinance knowing you'll clear the bar. At Funded Capital, DSCR loans start at 6.75% with up to 80% LTV and require no income verification, so the requirements below are the whole checklist.
The Core DSCR Loan Requirements
Every DSCR program is built around the same handful of qualifying factors. Hit them and the rest of the process is fast. Here's the at-a-glance version before we break each one down.
| Requirement | Typical Standard | Funded Capital |
|---|---|---|
| Minimum DSCR | 1.0 – 1.25 | 1.05 on every property type |
| Credit score | 660+ | 660+ for best pricing |
| Down payment | 20 – 25% | From 20% (up to 80% LTV) |
| Cash reserves | 3 – 6 months PITIA | 3 – 6 months |
| Property type | Non-owner-occupied residential | 1–4 unit, condo |
| Income docs | None | None |
The headline is the bottom row: no income documentation. What replaces it is the property's own cash flow, which is why the DSCR ratio sits at the top of the list.
DSCR Ratio Requirement
The debt service coverage ratio is the heart of the loan. It compares the property's monthly rent to its full monthly payment — principal, interest, taxes, insurance, and HOA dues (PITIA).
DSCR = Monthly Rent ÷ Monthly PITIA
A ratio of 1.0 means the property breaks even; the rent exactly covers the debt. Above 1.0, the property throws off surplus cash; below 1.0, the investor covers the shortfall out of pocket. If you want the full mechanics with worked examples, see our guide on how to calculate DSCR.
Most lenders set their floor between 1.0 and 1.25. A ratio of 1.25 or higher unlocks the best rates and the highest leverage, while a thin ratio near break-even may cap your LTV. Funded Capital's minimum is a 1.05 DSCR — rent must cover the full payment with at least a 5% cushion. If you're just under, more money down or an interest-only structure can often lift the ratio over the line. Run your numbers first with our loan calculator.
How to Strengthen a Borderline Ratio
If your DSCR comes in low, you have levers before you ever apply. A larger down payment shrinks the loan balance and lowers PITIA, lifting the ratio. A longer amortization or an interest-only period reduces the monthly payment. And buying right — negotiating price or targeting markets with stronger rent-to-price ratios — improves DSCR at the source.
Credit Score and Down Payment
After the ratio, two numbers drive your terms: credit score and down payment.
Credit Score
DSCR lenders generally look for a minimum FICO around 660, though programs exist below that with reduced leverage. Your score primarily affects pricing and maximum LTV rather than a simple yes or no. A 720-plus profile earns the sharpest rates and the highest leverage; a score in the 660s still qualifies but typically at a slightly higher rate or a lower LTV cap.
Because there's no income underwriting, credit carries more weight here than on a conventional loan — it's the lender's main read on how you handle debt.
Down Payment and LTV
DSCR loans are leverage-capped by loan-to-value. Most purchase programs top out at 75–80% LTV, meaning a 20–25% down payment. Funded Capital lends up to 80% LTV on qualifying DSCR purchases, so you can acquire with as little as 20% down.
On a refinance, the same ceilings apply to your equity. A rate-and-term refinance may reach 80% LTV, while a cash-out refinance usually caps a notch lower. This LTV structure is what makes the BRRRR strategy work: renovate, raise the rent, then refinance into a DSCR loan once the property cash flows and appraises higher.
Cash Reserves and Property Requirements
Two qualifying factors round out the file: reserves and the property itself.
Cash Reserves
Lenders want to see that you can carry the property through a vacancy or repair. Most DSCR programs require three to six months of PITIA in reserves after closing, held in a verifiable account. Higher loan amounts and cash-out refinances often sit at the upper end of that range. Reserves don't have to be cash in a checking account — many lenders count a portion of retirement or brokerage balances.
Eligible Property Types
DSCR loans are for non-owner-occupied investment properties. Standard eligible types include:
- Single-family rentals (1 unit)
- 2–4 unit residential properties
- Warrantable condos and townhomes
- Short-term rentals, where the program allows market or projected rent
The property must be rent-ready or already leased; the rent figure comes from the current lease or, on a vacant property, an appraiser's market-rent schedule (Form 1007 or 1025). Primary residences and most raw land don't qualify — DSCR is an investment-property product by design.
What Documents You Actually Need
This is where DSCR loans shine. Because the property qualifies the loan, the document list is short:
- Entity documents if you're borrowing through an LLC (operating agreement, articles)
- The purchase contract or, on a refinance, the current mortgage statement
- A lease or appraiser's rent schedule establishing the rent
- Two months of bank statements verifying down payment and reserves
- A credit authorization and a property insurance quote
No tax returns. No W-2s. No employment verification. No debt-to-income calculation. That streamlined file is exactly why DSCR loans close so fast — and why they're the preferred tool for investors whose tax returns understate their real buying power.
Ready to Get Funded?
Funded Capital is a Miami-based private lender serving real estate investors in 45 states. On our DSCR loans, the property's income qualifies the deal — no income verification, no tax returns, no W-2s.
DSCR loans start at 6.75% with up to 80% LTV, and we issue term sheets in about 2 hours on average and close in 5–10 business days. Whether you're acquiring a new rental or refinancing a stabilized one, we underwrite the deal, not your paperwork.
Or call us directly: (305) 857-5620 | processing@fundedcapital.com
If you place loans for investor clients, our broker program makes DSCR deals fast and predictable. New to the product? Start with how it works.
Frequently Asked Questions
What are the requirements for a DSCR loan?
The core DSCR loan requirements are a qualifying coverage ratio (typically 1.0 to 1.25), a credit score around 660 or higher, a down payment of 20–25% (up to 80% LTV), three to six months of cash reserves, and an eligible non-owner-occupied residential property. Notably, there's no income verification — no tax returns, W-2s, or employment documentation. Funded Capital finances DSCR loans starting at 6.75% with up to 80% LTV. Apply now to see your terms.
What credit score do you need for a DSCR loan?
Most DSCR lenders look for a minimum FICO around 660, though programs exist below that at reduced leverage. Your score mainly affects pricing and maximum LTV rather than approval itself — a 720-plus profile earns the best rates and highest leverage. Because there's no income underwriting, credit carries more weight on a DSCR loan than on a conventional mortgage.
How much down payment do you need for a DSCR loan?
Expect 20–25% down on most DSCR programs, which corresponds to a 75–80% loan-to-value cap. Funded Capital lends up to 80% LTV on qualifying purchases, so you can acquire with as little as 20% down. Cash-out refinances usually cap a notch lower than purchases or rate-and-term refinances.
What is the minimum DSCR to qualify?
Most lenders set a minimum DSCR between 1.0 and 1.25. A ratio of 1.0 means rent exactly covers the full payment (PITIA), and 1.25 or higher unlocks the best rates and leverage. Funded Capital's minimum is a 1.05 DSCR on every property type. Use our calculator to check your ratio before applying.
Do DSCR loans require income verification?
No. That's the defining feature of a DSCR loan — the property's rental income qualifies the deal, not your personal income. There are no tax returns, pay stubs, W-2s, or debt-to-income calculations. You'll provide entity documents, bank statements for the down payment and reserves, the lease or appraiser's rent schedule, and an insurance quote, which is why these loans close in 5–10 business days.
Terms are subject to underwriting, appraisal, title, and insurance.
Written by
Luis Fajardo
Senior Sales Director, Funded Capital · Lending to real estate investors nationwide — $500M+ funded across 1,200+ deals.