DSCR Loans

For Rental Property Investors
Apply Now: DSCR Loans Contact a Loan Officer: DSCR Loans
Purchase Options Refinance Options Home Equity Options Construction Loans Nontraditional Lending

Features

  • Loans up to $3 million 
  • Purchase or refinance
  • Short-term rentals allowed 
  • DSCR < 1.0 and No DSCR options available
  • No income or employment required; qualifications based on property cash flow
  • No limit on total number of financed properties a borrower can own
  • First time home buyer (FTHB) not allowed
  • Properties can vest title in LLC, S Corp, C Corp, or revocable trusts
  • Interest-only available; gift funds okay
  • Warrantable, non-warrantable, and condo hotels allowed
  • Not available in all states

About DSCR Loans

A Debt Service Coverage Ratio Loan (DSCR) is a type of mortgage used for purchasing short-term or long-term rental investment properties. With a DSCR loan, borrowers can qualify for a mortgage based on a property’s rental analysis. No personal income or employment information is required to qualify. Debt service coverage ratio or DSCR is a measurement of a property’s expected cash flow to determine ability to repay a mortgage loan. It is calculated by dividing the borrower’s net operating income by their debt obligations, including the debt payment. 

How is debt service coverage ratio (DSCR) calculated? 

The debt service coverage ratio (DSCR) is a ratio of a property’s cash flow to its annual mortgage debt. We include principal, interest, taxes, insurance and HOA fees in the mortgage debt. The ratio is calculated by taking the expected rental payment and dividing it by the annual mortgage debt RDP (Rent Divided PITIA = DSCR)
Example Rent Divided PITIA (RDP)
$1100 rent / $1000 PITIA = 1.10% DSCR Positive Cash Flow
$1000 Rent / $1000 PITIA = 1.00% DSCR 1 to 1 Break Even
$900 Rent / $1000 PITIA = .90% DSCR Negative Cash Flow

Other programs you might be interested in

Farm Bureau Mortgage specializes in helping our customers get the best home loans to fit their unique goals and needs, especially when traditional products won’t cut it. Self-employed borrowers, real-estate investors, retirees, or individuals with unique financial circumstances may also be interested in our Bank Statement loans, 1099 Income loan, Profit & Loss loan, or Asset Qualifier. 

Apply For A DSCR Loan
Go Back Home
Farm Bureau Bank is a full-service financial institution offering personal and business solutions to Farm Bureau members across the United States.
Disclosures:
Not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan and applicant's credit, income, property, and a minimum loan amount.
1 By refinancing the existing loan, the total finance charges may be higher over the life of the loan.