DSCR Loans — Also Known As Investor Loans

Your Rental Income Qualifies You — Not Your Tax Returns

Q: Is there a limit on how many properties I can finance?

No. DSCR loans are evaluated deal-by-deal based on each property's own cash flow, so a growing portfolio doesn't limit your ability to qualify for the next purchase, unlike conventional financing which caps the number of financed properties.

Q: Are there prepayment penalties on a DSCR loan?

Prepayment penalties are optional, not required. Borrowers can choose a structure with a prepayment period for better pricing, or opt for full flexibility to sell or refinance early without penalty.

If self-employment write-offs, complex tax returns, or a busy portfolio have made it hard to qualify for a traditional mortgage, a DSCR loan looks at what the property earns — not your personal income. Pete Metz at Von Mortgage helps real estate investors across Redding and Shasta County close on rental properties using nothing but the numbers that matter: the property's own cash flow.

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0.75 Minimum DSCR Ratio

660+ Typical Credit Score

15% Minimum Down Payment

$1M Max Loan, Up to 8 Units

The Basics

What Is a DSCR Loan?

A DSCR loan — Debt Service Coverage Ratio loan — is a type of investor loan that qualifies you based on the rental income a property generates, instead of your personal income, W-2s, or tax returns. Lenders calculate the property's DSCR by dividing its gross rental income by its total monthly housing payment (principal, interest, taxes, insurance, and association dues). A ratio of 1.0 means the property's rent exactly covers the payment; anything above 1.0 means it cash-flows with room to spare.

DSCR loans exist because traditional underwriting was built for W-2 employees, and it often penalizes real estate investors and self-employed borrowers who write off expenses to lower their taxable income. If your tax returns don't reflect your true earning power, or you simply own too many properties for a conventional lender's debt-to-income math to work, a DSCR loan sidesteps that problem entirely by looking at the deal itself.

Von Mortgage works with investors throughout Shasta County and beyond — from a first single-family rental to a growing portfolio of small multifamily properties — and can go as low as a 0.75 DSCR ratio, meaning the property doesn't even need to fully cover its own payment to qualify.

Plain-English version: Forget pay stubs and tax returns. We look at what the property rents for compared to what the mortgage payment will be. If the numbers work — or come close enough — you qualify, whether you're a W-2 employee, self-employed, or buying under an LLC.

Why Investors Choose DSCR

The Benefits of an Investor Loan Built Around Your Property

Whether you call it a DSCR loan or an investor loan, the advantages come down to speed, flexibility, and scalability — three things traditional mortgages weren't designed to offer investors.

No Tax Returns Required

Qualification is based on the property's rental income, not your personal income documentation. Skip the tax returns, W-2s, and pay stub hunt entirely.

Close in an LLC or Entity

Purchase and vest title in your business entity's name for liability protection and cleaner portfolio accounting — something most conventional loans won't allow.

No Limit on Number of Properties

Conventional financing caps how many financed properties you can hold. DSCR loans are evaluated deal-by-deal, so a growing portfolio doesn't work against you.

Short-Term Rental Income Counts

Airbnb and VRBO projected income can be used to qualify, not just long-term lease income — opening the door for short-term rental investors.

Interest-Only Options Available

Lower your monthly payment and improve cash flow with an interest-only period, giving you more flexibility on how you deploy your capital.

Finance Up to 8 Units

From a single-family rental to a small multifamily property, DSCR loans at Von Mortgage go up to 8 units and loan amounts up to $1,000,000.

Qualify With a 0.75 DSCR Ratio

Your property doesn't even need to fully cover its own payment to qualify — we work with ratios as low as 0.75, well below the typical 1.0 breakeven point.

Optional Prepayment Structures

Prepayment penalties are optional, not mandatory — giving you the choice between a lower rate with a prepay period or full flexibility to sell or refinance early.

Faster, Simpler Underwriting

Without personal income documentation to chase down, DSCR loans typically move through underwriting faster than conventional investment property loans.

The Process

How a DSCR Loan Works — Step by Step

01

Run the Numbers on the Property

Before anything else, we look at the property's rent (actual or market-rate, via an appraiser's rent schedule) against the projected mortgage payment. This tells us the DSCR ratio and whether the deal qualifies on its own merit.

02

Pre-Approval — Know Your Buying Power

We review your credit, available down payment (minimum 15%), and reserves to confirm your buying power. Pete will show you your estimated payment, whether interest-only makes sense, and how prepayment options affect your rate.

03

Find the Property & Make an Offer

Shop for a qualifying property — single-family, 2-4 unit, or up to 8 units — with confidence, knowing your buying power in advance. Vesting in an LLC or business entity is available if that fits your strategy.

04

Appraisal & DSCR Underwriting

An appraiser confirms value and provides a rent schedule for the property. Underwriting reviews the DSCR calculation, your credit, reserves, and the property itself — with no personal income documentation required.

05

Clear to Close & Start Collecting Rent

Once cleared to close, Pete walks through every fee on your Closing Disclosure. You sign, fund, and the property becomes part of your portfolio — cash flowing from day one.

DSCR vs. Other Investor Options

How a DSCR Loan Stacks Up Against Other Investor Financing

	DSCR / Investor Loan	Conventional Investment	Bank Statement Loan
Qualifies On	Property's rental income	Personal income (tax returns, W-2s)	Personal bank deposits
Tax Returns Needed	No	Yes	No
Min. Down Payment	15%	15–25%	10–20%
Min. Credit Score	660	620–680	620–660
Vest in LLC/Entity	Yes	Generally no	Varies by lender
Number of Financed Properties	No portfolio limit	Capped (typically 10)	Varies by lender
Short-Term Rental Income	Can be used to qualify	Typically not counted	Deposits only
Max Units	Up to 8	Up to 4 (typical)	Varies by lender
Best For	Investors, self-employed, portfolio buyers	W-2 buyers with strong DTI	Self-employed with strong deposits

Guidelines vary by lender and scenario. Figures shown reflect Von Mortgage's DSCR program; conventional and bank statement figures are general market ranges.

Do You Qualify?

DSCR Loan Eligibility & Requirements

DSCR loans are evaluated on the property and your credit profile — not your personal income documentation. Here's what we look at.

DSCR Ratio

0.75 Minimum

The property's rental income relative to its payment. We can qualify deals down to a 0.75 ratio — below the 1.0 breakeven point.

Credit Score

660+

A minimum credit score of 660 is required. Stronger scores may unlock better pricing and lower rates.

Down Payment

15% Minimum

Minimum down payment is 15% of the purchase price, depending on credit score, DSCR ratio, and property type.

Loan Amount

Up to $1,000,000

Loan amounts are available up to $1,000,000, covering everything from a single rental to a small multifamily purchase.

Property Types

Up to 8 Units

Single-family rentals, 2-4 unit properties, and small multifamily up to 8 units are eligible, including short-term rentals.

Reserves

Typically 6 Months PITIA

Lenders generally want to see roughly 6 months of principal, interest, taxes, insurance, and association dues in reserve.

Vesting

Personal or LLC/Entity

Close in your personal name or your business entity — a flexibility most conventional loans don't offer investors.

Rental Income Type

Long-Term or Short-Term

Both traditional lease income and projected short-term rental income (Airbnb/VRBO) can be used to qualify.

Prepayment & Rate Structure

Optional Prepay, Fixed or ARM

Prepayment penalty periods are optional — not required — and both fixed-rate and adjustable-rate options are available, along with interest-only.

Guidelines vary by lender and scenario. Final approval is subject to full underwriting review. This page is informational, not a commitment to lend. Call Pete and his team at (530) 221-7700 for your specific situation.

Frequently Asked Questions

Questions Investors Ask About DSCR & Investor Loans

What is a DSCR loan and how is it different from an investor loan?

A DSCR loan and an investor loan generally refer to the same product — a mortgage that qualifies you based on a property's rental income rather than your personal income. "DSCR" (Debt Service Coverage Ratio) is the technical term lenders use for the calculation itself, while "investor loan" is the broader, more commonly searched term for the same financing used by real estate investors to purchase rental property without W-2s or tax returns.

What DSCR ratio do I need to qualify?

Von Mortgage can qualify DSCR loans down to a 0.75 ratio, meaning the property's rental income only needs to cover 75% of the total monthly payment. A ratio of 1.0 or higher means the property fully covers its own payment, but you don't need to hit that mark to qualify.

Do I need to show my tax returns for a DSCR loan?

No. DSCR loans do not require personal tax returns, W-2s, or pay stubs. Qualification is based on the property's projected or actual rental income compared to the mortgage payment, along with your credit score and available reserves.

Can I buy an investment property under an LLC with a DSCR loan?

Yes. DSCR loans can be vested in a personal name or a business entity such as an LLC, which is a common structure investors use for liability protection and portfolio organization. This flexibility is one of the main reasons investors prefer DSCR financing over conventional loans.

Can I use Airbnb or short-term rental income to qualify?

Yes. Projected short-term rental income from platforms like Airbnb or VRBO can be used in the DSCR calculation, in addition to traditional long-term lease income, which opens the program up to short-term rental investors specifically.

What credit score and down payment do I need?

Von Mortgage requires a minimum credit score of 660 and a minimum down payment of 15% for DSCR loans. Loan amounts are available up to $1,000,000 on properties with up to 8 units.

Is there a limit on how many properties I can finance?

No. Unlike conventional financing, which typically caps the number of financed properties an investor can hold, DSCR loans are evaluated deal-by-deal based on each property's own cash flow, so a growing portfolio doesn't limit your ability to qualify for the next purchase.

Are there prepayment penalties on a DSCR loan?

Prepayment penalties are optional, not required. You can choose a structure with a prepayment period in exchange for better pricing, or opt for full flexibility to sell or refinance the property early without penalty — Pete can walk you through the tradeoffs for your specific goals.

Is an interest-only payment option available?

Yes. Interest-only options are available on DSCR loans, which can lower your monthly payment and improve cash flow — a popular choice for investors who want to maximize the spread between rent and their mortgage payment.

Ready to Qualify on the Deal, Not Your Tax Returns?

Let's Look at Your Next Investment Property

A free 15-minute call with Pete covers everything — running the DSCR on a property you're eyeing, confirming your down payment and reserve requirements, and showing you exactly what your payment looks like with or without interest-only.