Want to buy a rental property, but your tax returns do not show enough income? A DSCR loan may be the answer. These loans look at what the property can earn, not what you earn at your job. Here is what DSCR means, what Best Option Mortgage offers, and the main types of DSCR loans, all in plain words.
What is a DSCR loan?
DSCR stands for debt service coverage ratio. It is one simple math question: does the rent cover the monthly cost of the property?
Here is how the math works. Take the monthly rent and divide it by the monthly housing cost. That cost is the loan payment plus property taxes, insurance, and any HOA dues. Say the rent is $3,000 a month and the full monthly cost is $2,500. Divide $3,000 by $2,500 and you get 1.20. That number is the DSCR.
A DSCR of 1.0 means the rent exactly covers the costs. Above 1.0 means the property earns more than it costs. Below 1.0 means the rent falls a little short.
Here is the big idea: DSCR loan programs generally do not use your personal income to qualify. Instead of pay stubs, W-2s, or tax returns, the focus is on the property's rent. Your credit, your assets, and the rest of your file still matter. That is why these loans are popular with self-employed buyers and full-time investors.
One rule is firm. DSCR loans are only for investment properties. You sign a form that says the loan is for business use, and you cannot live in the home.
What do DSCR loans from Best Option Mortgage offer?
Best Option Mortgage is a DBA of ML Mortgage Corp., so we offer a full set of DSCR loan programs for investors. Depending on the program, you may see:
Loan amounts from $100,000 up to $2.5 million
Up to 80% of the purchase price
Credit scores starting at 640
30-year and 15-year fixed loans, interest-only choices, and ARM options
1 to 4 unit homes, condos, and properties with an ADU
Each program has its own rulebook, so your advisor matches your deal to the right fit.
The types of DSCR loans
It helps to think of DSCR loans in two ways: what you use them for, and how strict the rent test is.
By purpose:
Purchase. Buy a rental property and use its expected rent to qualify.
Rate-and-term refinance. Replace the loan on a rental you already own to get a better rate or term.
Cash-out refinance. Pull cash out of a rental property, often to help buy the next one.
By rent test:
Standard DSCR. The rent covers the full monthly cost, a ratio of 1.0 or higher.
Below 1.0 DSCR. Some programs allow the rent to fall short of the payment, with ratios as low as 0.75 for strong files.
No-ratio DSCR. Certain programs skip the rent math entirely when the rest of the file is strong.
There are also versions built for real-life situations:
Short-term rentals. Income from Airbnb and VRBO can count on several programs. Read our post on DSCR for short-term rentals for the details.
Foreign nationals. Some programs lend to buyers who live outside the U.S.
First-time investors. Some programs welcome new investors, usually with a higher credit score and a one-unit property.
How to get ready
Before you shop, pull your credit, gather bank statements, and make a list of any rentals you own. Plan for a down payment and some cash left in the bank after closing. New to investor loans? Our guides on non-QM loans and mortgage terms made simple explain the basics in plain English.
FAQ
What is a good DSCR ratio for a rental property loan?
A ratio of 1.0 or higher is the classic target, because the rent covers the whole payment. Some programs accept lower ratios, even down to 0.75, if the rest of your file is strong.
Can I get a DSCR loan without showing my personal income?
Generally, yes. The main test is the property's rent, not your job income. You still need decent credit, money for the down payment, and some cash in the bank after closing.
What credit score do I need for a DSCR loan?
It depends on the program. Scores start at 640 on some programs, while others ask for more. A higher score usually means better terms.
Can a first-time investor get a DSCR loan?
Often, yes. Some programs accept first-time investors, usually with a higher credit score, a one-unit property, and a home of your own. A first-time homebuyer, meaning someone who owns no property at all, may not qualify.
Can I use Airbnb or VRBO income for a DSCR loan?
Yes, on several programs. Short-term rental income has extra rules, like proof that the city allows short-term rentals at that address, so ask your advisor how your property would be reviewed.
Ready to see if a DSCR loan fits your next rental? Talk with Best Option Mortgage about your numbers before you make an offer. All loans are subject to approval, and program terms can change at any time.
Best Option Mortgage is a DBA of ML Mortgage Corp. ML Mortgage Corp. is a state-licensed mortgage lender, NMLS ID #362312, licensed by the CA Department of Financial Protection and Innovation under the Finance Lenders Law, License #60DBO69831. For other states, visit www.mlmortgage.net. To verify licenses, visit www.nmlsconsumeraccess.org. All loans are subject to credit approval and acceptable collateral. Additional terms and conditions apply. Programs, rates, terms, and conditions may change without notice. Not all programs are available in all states. There is no guarantee that all borrowers will qualify. Restrictions may apply. This is not a commitment to lend. © 2026 ML Mortgage Corp. All rights reserved.