DSCR = rent ÷ PITIA. Minimum 1.0 (1.25+ best pricing; sub-1.0/no-ratio available with more down). Credit: ~620–640 floor, 680 for ARM/IO, 720+ best. Down: 20–25% (15% strong files). Reserves: 3–6 months. Property: non-owner-occupied investment, 1–4 units + condos. Vesting: personal or LLC. No property-count cap. See Eligibility.
On this page
How DSCR is calculated
The whole loan turns on one formula:
where PITIA = Principal + Interest + Taxes + Insurance + HOA (if any).
Example: $3,000 rent ÷ $2,400 PITIA = DSCR 1.25 — the rent covers the payment with 25% to spare. A DSCR of 1.0 means rent exactly equals the payment; below 1.0 means it falls short (still financeable on some programs with more down).
Rent is taken from the lease or, for a vacant unit, from the appraiser's market-rent schedule (Form 1007). No personal income enters the calculation at all.
Minimum ratio & credit tiers
| DSCR | What it means | Effect |
|---|---|---|
| 1.25+ | Rent well above payment | Best rates & LTV |
| 1.00–1.24 | Rent covers payment | Standard pricing |
| 0.75–0.99 | Slight shortfall | More down, higher rate |
| No-ratio (<0.75) | Not measured on rent | Largest down, top rate |
| Credit score | Typical effect |
|---|---|
| 720+ | Best rates, lowest down |
| 680–719 | Unlocks ARM / interest-only |
| 620–679 | Common floor; more down, higher rate |
Down payment & reserves
| Requirement | Typical 2026 standard |
|---|---|
| Down payment | 20–25% (some 15% for strong files); more down raises your DSCR |
| Reserves | 3–6 months of PITIA (6+ for larger loans / lower DSCR) |
| DTI | None — no personal income or DTI used |
| Mortgage insurance | None at any LTV |
Because a bigger down payment lowers PITIA, it does double duty on a DSCR loan — it reduces your risk and lifts your ratio into a better tier. See how in the calculator.
Property, vesting & the no-cap advantage
- Property type: non-owner-occupied investment — single-family, 1–4 units, condos, often short-term rentals. No primary residences.
- Vesting: hold title personally or in an LLC — DSCR is the go-to for investors who want liability protection.
- No property-count cap: unlike conventional financing (capped around 10 financed properties), DSCR lets you keep scaling a portfolio.
DSCR requirement FAQs
How is DSCR calculated?
Gross monthly rent ÷ PITIA (principal, interest, taxes, insurance, HOA). 1.0 means rent equals the payment.
Minimum DSCR?
Usually 1.0; 1.25+ for best pricing. Sub-1.0 and no-ratio exist with more down and a higher rate.
Credit score?
~620–640 floor, 680 for ARM/IO, 720+ best pricing.
How much down?
20–25% typically (15% for strong files). More down raises your DSCR.
Personal income docs?
None — DSCR qualifies on the property's rent, so no tax returns, W-2s, or personal DTI.
Reviewed by the licensing team at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties from offices in Newport Beach and Marina del Rey.