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DSCR Loans: How to Buy Rental Property Using Only the Property’s Income (2026)

An overview of DSCR loans and how rental property income is used to qualify without personal earnings.

We work with aspiring investors nationwide to purchase 1–4 unit rental properties when qualification depends solely on the property’s income.
Many of these buyers are turned away early because traditional lenders require personal income, even when the property itself supports the payment.

Real Denial Scenario

You identify a 3-bedroom single-family rental or small duplex in an affordable market.
Purchase price: $180,000–$250,000.
Projected rents: $1,600–$2,100 per month based on local comps.

You have savings for a down payment and want to use a DSCR loan so approval does not rely on your W-2 income or tax returns.

The typical lender calculates DSCR by dividing gross rents by PITIA (principal, interest, taxes, insurance). Due to purchase price relative to achievable rents, combined with taxes and insurance, the ratio comes in at 0.85–0.95.

Most programs require a minimum DSCR of 1.0 or higher, so the loan is denied.

Why This Happens

DSCR loans qualify based on whether rental income covers the full monthly housing payment with a margin of safety. A ratio below 1.0 indicates the property does not fully service the debt on its own, increasing risk if vacancies or repairs occur.

For entry-level investors, this is common. In many markets, purchase prices have outpaced rent growth, especially after factoring in PITIA components. Standard programs enforce hard minimums (often 1.0–1.25) without flexibility, blocking deals that may still make long-term sense.

The Actual Rules That Matter

Conrad Mortgage offers multiple DSCR variations for nationwide purchases of 1–4 unit residential investment properties, including single-family homes, duplexes, triplexes, and fourplexes. Condos and PUDs may be eligible with review.

General program guidelines for purchases include:

Maximum LTV: 80% (20% minimum down payment)
Minimum DSCR: as low as 0.8 on select variations
Rent qualification:
- 100% of lease rent if a lease is in place
- Market rent from appraisal used if no lease is signed prior to closing
Minimum credit score: 620
Reserves: Not required on select variations
Seasoning: 0 on certain lines
Minimum loan amount: as low as $50,000 on select programs
No personal income verification or DTI calculation — property income only
Eligible properties: 1–4 unit long-term rentals (short-term rentals may require review)

These are non-QM investor loan programs. Guidelines vary by lender and program and are subject to change.

Legitimate Options When DSCR Falls Short

If a property does not meet stricter DSCR thresholds elsewhere:

Use a DSCR variation that allows ratios as low as 0.8
Secure a full-year lease prior to closing to support 100% rent qualification
Confirm the loan amount meets minimum thresholds on lower-DSCR programs
Leverage zero-seasoning options where available

The goal is not to force a deal, but to match the correct DSCR structure to the property’s documented income and purchase terms.

What Gets Reviewed

Approval decisions typically focus on:

Purchase contract showing price and terms
Appraisal confirming value, LTV, and market rent if no lease is in place
Lease agreement, if signed prior to closing
Credit report (minimum FICO 620)
PITIA breakdown using quoted rate and local tax and insurance estimates
Title and ownership documentation

The following are not typically required:

Tax returns
Paystubs
Bank statements for income verification
Debt-to-income calculations

Neutral Next Step

If you’re an investor evaluating a 1–4 unit rental purchase and are concerned about DSCR falling below standard lender requirements, start with a numbers review.

Provide the property type and location, estimated purchase price, projected or lease rents, down payment amount, and general credit range. DSCR can be calculated using available program variations to determine whether the deal fits before a full submission.

All loans are subject to underwriting, appraisal, title review, and final approval. This content is for general informational purposes only and does not constitute a loan commitment.

Why Choose Conrad Mortgage?

Conrad Mortgage is based in Strongsville, Ohio, serving buyers and investors nationwide with clear underwriting expectations, accurate documentation review, and loan options aligned with how borrowers actually qualify in today’s market.

Have questions about DSCR loans or rental property options?
Speak with a licensed loan officer to discuss next steps. →

Written by Brian Shapiro
Investor Lending Specialist
Northeast, Ohio

02/03/2026