DSCR Loan Calculator 2025: Calculate Your Rental Property Debt Service Coverage Ratio
David Rodriguez
Investment Property Specialist • 22 min read
🧮 Free DSCR Calculator
Looking for a DSCR loan calculator? Our free tool above calculates your Debt Service Coverage Ratio instantly. DSCR loans are the #1 choice for real estate investors in 2025 because they qualify you based on rental income only—no tax returns, no W-2s, no income verification. Whether you're buying your first rental property or scaling to 100+ units, this guide covers everything you need to know.
💡 Quick DSCR Formula
DSCR = Monthly Rent ÷ Monthly PITIA
Example: $2,500 rent ÷ $2,000 mortgage = 1.25 DSCR ✅
✓ No credit impact • ✓ 2-minute application
What is a DSCR Loan? Complete Explanation 📚
A DSCR loan (Debt Service Coverage Ratio loan) is a type of non-QM mortgage designed specifically for real estate investors. Unlike traditional mortgages that require proof of personal income (W-2s, tax returns, pay stubs), DSCR loans qualify borrowers based solely on the property's rental income.
The "Debt Service Coverage Ratio" measures whether a property's income can cover its debt obligations. A DSCR of 1.0 means the rent exactly equals the mortgage payment. A DSCR of 1.25 means the rent is 25% higher than the mortgage—providing a cash flow cushion.
✅ Who DSCR Loans Are Perfect For
- Self-employed investors: No tax returns needed
- High-net-worth individuals: Complex income structures OK
- Portfolio builders: No limit on number of properties
- Foreign nationals: Many lenders accept non-US citizens
- LLC/Corp buyers: Close in entity name
- Airbnb hosts: Short-term rental income accepted
How to Calculate DSCR: Step-by-Step Guide 🧮
Determine Monthly Rental Income
Use actual lease rent OR market rent from appraisal. For Airbnb, use 75% of trailing 12-month average.
Calculate Monthly PITIA
Principal + Interest + Taxes + Insurance + HOA (Association dues). This is your total monthly housing cost.
Divide Rent by PITIA
DSCR = Rent ÷ PITIA. Example: $3,000 rent ÷ $2,400 PITIA = 1.25 DSCR
Interpret Your Result
1.25+ = Excellent | 1.0-1.24 = Acceptable | Below 1.0 = Negative cash flow (limited lenders)
DSCR Calculation Examples 📊
| Scenario | Monthly Rent | Monthly PITIA | DSCR | Result |
|---|---|---|---|---|
| Strong Cash Flow | $3,500 | $2,500 | 1.40 | ✅ Best rates |
| Good Cash Flow | $2,500 | $2,000 | 1.25 | ✅ Easy approval |
| Break-Even | $2,000 | $2,000 | 1.00 | ⚠️ Most lenders OK |
| Negative Cash Flow | $1,800 | $2,200 | 0.82 | ❌ Limited options |
DSCR Loan Requirements 2025 📋
📊 Credit & Financial
- Credit Score: 620-680 minimum (varies by lender)
- Down Payment: 20-25% typical
- Reserves: 6-12 months PITIA
- Bankruptcy: 2-4 years seasoning
- Foreclosure: 3-7 years seasoning
🏠 Property Requirements
- Property Type: 1-4 unit, condo, townhouse
- Occupancy: Investment only (no primary residence)
- Loan Amount: $100K - $3M+
- LTV: Up to 80% (75% for lower DSCR)
- Appraisal: Required with rent schedule
Top DSCR Loan Lenders 2025 🏆
| Lender | Min DSCR | Min Credit | Max LTV | Rates From | Specialty |
|---|---|---|---|---|---|
| Kiavi | 1.0 | 680 | 80% | 7.25%+ | Fix & flip, rental |
| Visio Lending | 0.75 | 660 | 80% | 7.5%+ | Long-term rentals |
| Lima One Capital | 1.0 | 660 | 80% | 7.75%+ | New investors |
| CoreVest | 1.0 | 680 | 75% | 7.5%+ | Portfolio loans |
| Easy Street Capital | 0.75 | 620 | 80% | 8.0%+ | Low credit OK |
💡 Pro Tip: Compare Multiple Lenders
DSCR loan rates and terms vary significantly between lenders. A 0.5% rate difference on a $300K loan = $90/month or $32,400 over 30 years. Always get quotes from 3-5 lenders before committing.
DSCR Loan Pros and Cons ⚖️
✅ Pros
- No income verification: No W-2s, tax returns, or pay stubs
- Unlimited properties: No cap like conventional (10 max)
- Fast closing: 2-3 weeks vs 30-45 days
- LLC/Corp OK: Close in entity name for liability protection
- Self-employed friendly: Perfect for business owners
- Airbnb income: Short-term rentals accepted
- Foreign nationals: Many lenders accept non-US citizens
❌ Cons
- Higher rates: 0.5-1.5% above conventional loans
- Larger down payment: 20-25% vs 15% conventional
- Higher closing costs: 2-4% of loan amount
- Investment only: Cannot use for primary residence
- Prepayment penalties: Some loans have 1-5 year PPP
- Higher reserves: 6-12 months required
DSCR Loan vs Conventional Investment Property Loan 🔄
| Feature | DSCR Loan | Conventional |
|---|---|---|
| Income Verification | ❌ Not required | ✅ Required (2 years) |
| Property Limit | Unlimited | 10 max |
| Interest Rates | 7.25-9.5% | 6.75-8.0% |
| Down Payment | 20-25% | 15-20% |
| Closing Time | 2-3 weeks | 30-45 days |
| LLC Closing | ✅ Yes | ❌ Personal only |
| Best For | Self-employed, scaling investors | W-2 employees, 1-10 properties |
DSCR Loans in California 2025 🌴
California is one of the hottest markets for DSCR loans due to high rental demand and property values. Here's what California investors need to know:
🏠 California DSCR Loan Facts
- Average DSCR needed: 1.0-1.25 (high rents help)
- Typical loan amounts: $500K - $2M+
- Popular markets: LA, San Diego, Sacramento, Inland Empire
- ADU income: Many lenders count ADU rent toward DSCR
- Prop 13 benefit: Low property taxes help DSCR ratios
How to Get a DSCR Loan: Step-by-Step 📝
Calculate Your DSCR
Use our calculator above. Aim for 1.25+ for best rates. Know your target property's rent potential.
Check Your Credit Score
Most lenders need 660+. 740+ gets best rates. Fix any errors before applying.
Compare Multiple Lenders
Get quotes from 3-5 DSCR lenders. Compare rates, fees, and terms. Use our comparison tool below.
Submit Application
Provide: ID, credit authorization, property address, purchase contract, entity docs (if LLC).
Appraisal & Underwriting
Lender orders appraisal with rent schedule. Underwriting takes 5-10 days. No income docs needed!
Close & Fund
Close in 2-3 weeks. Wire down payment + closing costs. Start collecting rent!
Ready to Get Your DSCR Loan? 🚀
Compare top DSCR lenders and get pre-qualified in minutes. No income verification required.
✓ No credit impact • ✓ 2-minute application • ✓ Rates from 7.25%