What is a NON-QM DSCR Loan?
A NON-QM DSCR Loan (Debt Service Coverage Ratio loan) is a non-qualified mortgage designed for real estate investors. Instead of using personal income or tax returns, it qualifies borrowers based on the rental income of the property.
NON-QM DSCR Loan Requirements
- No personal income or tax returns required
- Minimum DSCR: Usually 1.00 or higher (some allow below 1.00)
- Credit Score: Typically 620+ (680+ preferred for best rates)
- Property Type: Must be a rental/investment property
- Lease Agreement or Market Rent Report (Form 1007) to verify income
- Reserves: 3–12 months of mortgage payments may be required
- LLCs and Corporations: Allowed to borrow in business name (in many cases)
Why Choose a NON-QM DSCR Loan?
- Perfect for investors who don’t show much income on taxes
- Skip the hassle of W-2s, pay stubs, or bank statements
- Close loans in LLC or business entity name
- Great option for portfolio expansion without income limits
Down Payment Options for NON-QM DSCR Loans
- Minimum down payment Usually 15%–20%
- Lower down = higher rate (best terms with 25%+ down)
- No mortgage insurance required (even under 20% down)
- Gift funds may be accepted in some programs
Benefits of NON-QM DSCR Loans
- No personal income or employment verification
- Ideal for self-employed or full-time real estate investors
- Use rental income to qualify
- Can close in the name of an LLC
