Guide · Property
DSCR loans: the property's rent is what qualifies
If you invest in rental property, a DSCR loan looks mainly at what the property brings in, more than your pay stubs or tax returns.
What is DSCR?
DSCR stands for debt service coverage ratio. In plain words: how well the rent covers the property's monthly payment. If the rent is $2,400 and the full payment (mortgage, taxes, insurance and any association fee) is $2,000, the DSCR is 1.2. Lenders usually look for 1.0 to 1.4 or more.
What does it take?
Under Lexington's general guidelines: a credit score of 650 or higher, 15% to 20% down, and it must be an investment property, not the home you live in. There are 30-year fixed or adjustable options, for short-term and long-term rentals.
Who is it for?
Investors growing a portfolio, and business owners or self-employed people whose income is hard to show with pay stubs. It also fits the buy, renovate, rent and refinance strategy.
The truth: a property that barely covers its payment has no room for an empty month or a big repair. Run the numbers with those surprises before you buy.
See the requirements for Rental loans (DSCR) · All guides
These are Lexington Capital's general guidelines and can change. This guide is education, not an offer of credit.
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Financing is provided by Lexington Capital, not by Kevin or Retire With Kevin. Kevin is a referral partner of Lexington Capital, not a lender, and may receive a referral fee. Lexington Capital reviews every application and makes all credit decisions. Not every applicant is approved, and terms depend on the lender and your situation.