Investor Agent Guide

DSCR Investor Loans

How to qualify your investor buyers without tax returns

Ryan Van Til

Pacific Trust Mortgage

NMLS #2336853

(805) 801-1380

What is a DSCR Loan?

DSCR (Debt Service Coverage Ratio) loans let investors qualify based on the property's rental income covering the mortgage payment — not personal income, W-2s, or tax returns. This means your investor client who owns 15 properties and shows $40K on their taxes can still close.

The DSCR Formula

DSCR = Monthly Rent ÷ Monthly PITIA

PITIA = Principal + Interest + Taxes + Insurance + HOA (if applicable)

Real Examples

Below Threshold

Rent: $1,800/mo

PITIA: $2,800/mo

0.64x

Won't qualify — needs more rent or more down

Possible Qualification

Rent: $2,100/mo

PITIA: $2,800/mo

0.75x

May qualify with higher down + reserves

Strong

Rent: $2,800/mo

PITIA: $2,800/mo

1.0x

Best pricing and terms

Requirements at a Glance

Min Down Payment	20–25%
Min Credit Score	660+
Min DSCR Ratio	1.0x standard (0.80x with some lenders)
Loan Amount	$150K–$3M
Property Types	SFR, 2–4 unit, condo, townhome
Occupancy	Investment only (no primary residence)
Income Docs	Not required — qualify on property cash flow
Entity	Can close in LLC, Corp, or personal name
Max Properties	No limit
Reserves	3–12 months PITIA (varies by lender/DSCR)
Prepayment Penalty	Typically 3–5 year step-down (5/4/3/2/1)
Close Time	21–30 days

How Rent Is Determined

Existing lease: Lender uses the current lease amount
No lease / new purchase: Appraiser provides a “market rent” estimate on a 1007 rent schedule (included with the appraisal)
Short-term rental (Airbnb): Some lenders use Airbnb income projections (AirDNA or similar). Others require a 12-month rental history. Ask me about STR-friendly lenders
Multi-unit: Aggregate rent from all units. Vacancy factor may apply (typically 5–10%)

Tips for Working with Investors

Run the DSCR Before You Write

Get estimated rent and estimated PITIA before making an offer. If DSCR is below 0.80, the deal likely won't pencil without more down payment. Text me the numbers and I'll run it in 5 minutes.

Prepayment Penalties Are Normal

Most DSCR loans have a 3–5 year prepay penalty (e.g., 5% year 1, 4% year 2, etc.). This isn't a red flag — it's standard for Non-QM investor products. Buydown options are available.

LLC Closings

DSCR loans can close in an LLC or corporate entity. Your investor client needs the operating agreement and EIN. No personal income docs needed regardless.

Portfolio Scale

There's no cap on how many DSCR loans an investor can have. I've worked with investors scaling from property 1 to 20+. Each property qualifies independently.

Ryan Van Til

Mortgage Advisor · Pacific Trust Mortgage

NMLS #2336853

(805) 801-1380

ryan@pactm.com

ryanptm.com