Your investment property might be able to pay for itself
What if your next mortgage didn’t depend on your personal income at all? A DSCR loan, short for Debt Service Coverage Ratio loan, makes that possible. Instead of looking at your tax returns or pay stubs, lenders use the rental income your property generates to determine if you qualify. It’s one of the smartest tools available for real estate investors who want to grow their portfolio without jumping through the usual hoops.
Whether you’re buying your first rental or your fifteenth, a DSCR loan from First Heritage Mortgage can help you move faster, qualify easier, and keep building toward your goals.
Why Investors Love DSCR Loans
DSCR loans are specifically crafted with investors in mind, providing the flexibility and benefits you need to succeed in today’s competitive real estate market:
- No personal income requirements: Qualify based on the rental income generated by your investment property.
- Loans up to $2.5 million: With a minimum of $100,000, there’s room for deals of all sizes.
- Up to 80% loan-to-value (LTV): Maximize your leverage and keep more cash in your pocket.
- Flexible terms: Choose from 30-year fixed rates or 10-year interest-only options.
- Long-term and short-term rentals both qualify: Whether it’s a lease or a vacation rental, it counts.
- No cap on the number of properties: Scale your portfolio without hitting a wall.
More About DSCR Loans
DSCR stands for Debt Service Coverage Ratio. It's a simple formula that compares a property's rental income to its mortgage payment. A ratio of 1.0 means the property breaks even. Above 1.0 means it generates positive cash flow, which is what lenders want to see. The higher your ratio, the stronger your application.
No, and that's the biggest advantage of this program. Qualification is based entirely on the rental income the property generates, not your personal tax returns, pay stubs, or W-2s. This makes DSCR loans especially powerful for investors whose personal income looks lower on paper due to business deductions.
Yes. Both long-term leases and short-term rentals, including vacation rentals, are eligible. Your loan officer can help you document projected rental income for short-term properties.
No. Unlike many conventional loan programs, there is no cap on the number of properties you can finance through this program. It's designed to scale with your portfolio.
Yes. Eligible borrowers include individuals, LLCs, limited partnerships, corporations, and general partnerships. This gives investors the flexibility to structure their acquisitions in whatever way makes the most sense for their business.
The program covers 1–4 unit residential properties, both attached and detached, as well as non-warrantable condos. It is available for investment properties only. Primary residences do not qualify.
Yes. This program is open to both experienced investors and those purchasing their first investment property.
Explore our other specialty loan programs
Not sure if a DSCR loan is the right fit for your needs? Not to worry. First Heritage Mortgage offers a full suite of specialty loan programs, each designed for a specific type of borrower situation.
Bank Statement Loans
Self-employed? Skip the tax returns. Eligible borrowers can qualify using 12 or 24 months of bank statements and get access to loan amounts up to $3.5 million.
Non-Warrantable Condo Loans
Found the condo you love, but heard it’s non-warrantable? We specialize in financing for condos that fall outside conventional guidelines, with loan amounts up to $2 million for eligible buyers.
Loans for Medical Professionals
A mortgage program built around your career. Qualify using a future employment contract, borrow up to $2 million, and buy with as little as zero down with no mortgage insurance required.
How does a DSCR loan work?
The Debt Service Coverage Ratio measures your property’s ability to cover its operating expenses, including mortgage payments, with its rental income. Here’s a quick example:
If your property generates $3,000 in monthly rental income and your monthly mortgage payment is $2,500, your DSCR is 1.2. A DSCR greater than 1.0 typically indicates that the property’s income covers its debt obligations, which is key for loan qualification.
Who qualifies for a DSCR loan?
With straightforward qualifying criteria, DSCR loans are a streamlined option for busy investors. Here’s what you need to know:
- Credit score: Most DSCR loan mortgage lenders look for a FICO score of 700 or higher.
- Investment properties only: Available for the purchase or refinance of investment properties.
- Eligible borrower types: Open to U.S. citizens, lawfully present non-U.S. citizens, and entities such as LLCs or corporations.
Key program benefits
- Loan-to-value (LTV) ratios up to 80%.
- Wide eligibility: Open to both experienced and first‑time investors.
- Flexible borrower types: Individuals, LLCs, LPs, partnerships, and corporations can apply.
- Eligible property types include:
- 1-4 unit residential properties
- Attached or detached homes
- Non-warrantable condos
Alternatives to DSCR loans
If a DSCR loan isn’t the right fit for your investment strategy, First Heritage Mortgage offers several other financing solutions to meet your needs. Here are some popular alternatives:
- Bank statement loans: Instead of relying on tax returns or W-2s, these loans use your bank statements to assess income, making them a flexible option for entrepreneurs or small business owners. Learn more about Bank Statement Loans.
- Bridge loans: A bridge loan provides short-term financing to help you secure a new property before selling an existing one. These loans are often ideal for investors and homeowners looking to quickly seize new opportunities in a competitive market. Click here to learn more.
Whether you’re exploring alternatives or need guidance on choosing the right loan, our team is here to help. Contact us today to learn more about these programs and discover which option aligns with your goals.
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Let’s put your property to work
Your next investment doesn’t have to wait. A DSCR loan gives you a faster, smarter path to financing with terms built around your property’s potential, not your paperwork.
Talk to a First Heritage Mortgage loan officer today and find out how much you may qualify for.
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