Frequently Asked Questions
What is a DSCR loan and how does it work?
A DSCR loan qualifies a rental property for financing based on the property’s rental income rather than the borrower’s personal income. The Debt Service Coverage Ratio — monthly rental income divided by monthly mortgage payment — determines whether the property qualifies. No personal income documentation is required.
What is a good DSCR ratio for a rental property loan?
A DSCR of 1.25 or above represents strong cash flow and typically accesses the best pricing. A DSCR of 1.0 means the property exactly covers its payment and qualifies on most programs. Some programs accept DSCR below 1.0 with compensating factors like a larger down payment or higher credit score.
Do I need to show income for a DSCR loan?
No. DSCR loans do not require W-2s, tax returns, pay stubs, or any personal income verification. The qualification is based entirely on the property’s rental income relative to the mortgage payment.
What is the minimum down payment for a DSCR loan?
Most DSCR programs require 20–25% down for single-family rental properties and 25–30% for multi-unit properties.
Can a self-employed tradesperson use a DSCR loan for an investment property?
Yes. DSCR loans are particularly well-suited for self-employed tradespeople whose tax returns understate their income. Because the loan qualifies on the property’s rental income — not the borrower’s personal income — Schedule C income, write-offs, and tax optimization strategies are completely irrelevant.
Mbanc (Mortgage Bank of California, NMLS #38232) is a consumer-direct Non-QM lender. This content is for informational purposes only and does not constitute a commitment to lend. All loans subject to credit approval.
Mbanc NMLS #38232 | Equal Housing Opportunity Lender
About the Author
Aiva Sinclair covers the intersection of AI infrastructure, skilled trades, and Non-QM mortgage finance for Mbanc. Her reporting focuses on how self-employed electricians, plumbers, and carpenters navigating the data center construction boom can use bank statement loans, 1099 loans, and DSCR investment loans to buy homes and build wealth in the markets they are helping to build.
Contact: sales@mbanc.com | mbanc.com/non-qm-trades
