DSCR Loan Frequently Asked Questions

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What credit score is required for a DSCR loan?

Ei8ht Street Funding generally requires a minimum 660 FICO score for a DSCR loan.

Our current DSCR requirements are:

• 680+ FICO: Minimum 1.00 DSCR

• 660–679 FICO: Minimum 1.15 DSCR

• Foreign Nationals: Minimum 1.30 DSCR

Borrowers with lower credit scores may still have financing options through Ei8ht Street Funding under alternative rental-property programs. Minimum Credit score of 500

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What is the maximum LTV for a DSCR loan?

For qualifying 1–4 unit investment properties, Ei8ht Street Funding offers:

• Purchase: Up to 80% LTV

• Rate-and-Term Refinance: Up to 80% LTV

• Cash-Out Refinance: Up to 75% LTV

Other property types generally have the following maximum leverage:

• 5+ Unit Multifamily: Up to 70% LTV DSCR - Up to 75% Non DSCR

• Mixed-Use: Up to 75% LTV (Non DSCR)

• Office / Warehouse / Select Commercial: Up to 70% LTV (non DSCR)

Maximum leverage is subject to borrower qualification, credit, DSCR, property type, appraisal and overall loan review.

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Can I qualify for a DSCR loan without tax returns?

Yes. DSCR loans are primarily underwritten based on the property's rental income and ability to support the mortgage payment rather than the borrower's traditional personal income. Ei8ht Street Funding's DSCR programs generally do not require personal tax returns, pay stubs or traditional debt-to-income qualification.

This makes DSCR financing particularly useful for:

• Self-employed investors

• Business owners

• Full-time real estate investors

• Borrowers with significant write-offs

• Investors purchasing properties through LLCs

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Can I finance a short-term rental with a DSCR loan?

Yes. Ei8ht Street Funding can finance eligible short-term rental properties, including qualifying properties in vacation destinations such as beach and mountain markets.

For qualifying short-term rentals, projected income may be evaluated using 80% of AirDNA-supported rental income.

The property and market must still meet Ei8ht Street Funding's eligibility requirements.

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Can foreign nationals obtain a DSCR loan?

Yes.Ei8ht Street Funding offers DSCR financing to qualifying foreign national real estate investors. Foreign-national DSCR loans generally require a minimum 1.30 DSCR.

Foreign nationals residing in the United States who have an eligible U.S. credit score may be underwritten based on their credit profile rather than automatically receiving a foreign-national LTV reduction. Borrower documentation, residency status, liquidity and property eligibility requirements still apply.

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Can I get a rental-property loan with a credit score below 600?

Potentially, yes. While Ei8ht Street Funding's traditional DSCR program generally requires a minimum 660 FICO, we also offer an alternative non-DSCR rental loan option for qualifying borrowers with credit scores as low as 500. Because these loans fall outside the standard DSCR program, borrowers should expect different pricing and underwriting requirements.

This means a credit score below 600 does not necessarily prevent a real estate investor from obtaining long-term rental financing.

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What is a DSCR loan?

A Debt Service Coverage Ratio, or DSCR, loan is an investment-property mortgage that primarily qualifies the borrower based on the rental property's ability to generate enough income to cover its debt payments.

Instead of relying primarily on personal income and tax returns, the lender compares qualifying rental income with the property's required mortgage obligations.

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How is DSCR calculated?

A simplified DSCR calculation is:

Qualifying Monthly Rent ÷ Monthly Property Debt Obligation = DSCR

For example:

If qualifying rent is $2,500 per month and the qualifying monthly property payment is $2,000, the property's DSCR would be:

$2,500 ÷ $2,000 = 1.25 DSCR

A DSCR above 1.00 generally means the property's qualifying rental income exceeds the qualifying debt obligation.

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What does a 1.00 DSCR mean?

A 1.00 DSCR means that qualifying rental income is approximately equal to the qualifying property debt obligation.

For example:

$2,000 qualifying rent ÷ $2,000 qualifying payment = 1.00 DSCR

Ei8ht Street Funding allows qualifying borrowers with a 680+ FICO to qualify at a minimum 1.00 DSCR.

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Do DSCR loans require employment verification?

Traditional employment verification generally is not required in the same manner as a conventional mortgage, because DSCR underwriting focuses primarily on the property's income rather than the borrower's employment income.

Borrowers will still need to meet credit, liquidity, entity, property and other underwriting requirements.

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Do DSCR loans require W-2s or pay stubs?

No. Ei8ht Street Funding's DSCR program does not rely on W-2 income or pay stubs to qualify the borrower in the traditional manner.

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Can self-employed borrowers qualify for a DSCR loan?

Yes. DSCR loans are commonly used by self-employed borrowers because qualification is primarily based on the investment property's rental income rather than traditional employment income.

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Can an LLC get a DSCR loan?

Yes. Investment properties can generally be financed in an eligible business entity such as an LLC, subject to underwriting and entity-documentation requirements.

Borrowers should be prepared to provide documents such as:

• Articles of Organization

• Operating Agreement

• EIN documentation

• Identification for guarantors or members

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Can I cash out refinance a rental property with a DSCR loan?

Yes. Ei8ht Street Funding offers qualifying cash-out refinances up to 75% LTV on eligible 1–4 unit rental properties. Cash-out proceeds can be used for purposes including purchasing additional investment properties, renovations, business purposes or other eligible investment-related uses.

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Can cash-out proceeds count toward my required reserves?

Yes, partially. Under Ei8ht Street Funding's current guidelines, 25% of eligible cash-out proceeds may count toward liquidity requirements.

Eligible HELOC funds may also be considered when determining available liquidity.

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How much money do I need in reserves for a DSCR loan?

For qualifying U.S. borrowers, Ei8ht Street Funding generally requires approximately six months of reserves. Foreign-national borrowers generally require approximately nine months of reserves. Actual reserve requirements can vary based on the specific transaction and underwriting profile.

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What property types qualify for DSCR financing?

Ei8ht Street Funding finances several types of investment properties, including:

• Single-family rental properties

• 2–4 unit properties

• 5+ unit multifamily properties (9 unit max) -10+ must use non-dscr commercial product

• Short-term rentals

• Mixed-use properties

• Select office properties

• Warehouses

• Storage properties

• Certain other commercial investment properties

Properties must be used for investment purposes.

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What is the minimum DSCR loan amount?

Ei8ht Street Funding's minimum loan amount is generally $75,000.

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What is the maximum DSCR loan amount?

Ei8ht Street Funding offers qualifying long-term rental loans of up to $5,000,000.

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Are DSCR loans available for first-time investors?

Yes. Investor experience, credit, liquidity, property characteristics and the overall transaction will be reviewed when determining eligibility. However we do lend to first time investors

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Can I use a DSCR loan to purchase a property?

Yes. Qualified investors can use DSCR financing to purchase eligible rental properties with leverage of up to 80% LTV on qualifying 1–4 unit properties.

That can mean a down payment starting around 20%, subject to underwriting.

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Can I refinance an existing rental property into a DSCR loan?

Yes. Ei8ht Street Funding offers both:

• Rate-and-term refinances up to 80% LTV

• Cash-out refinances up to 75% LTV

on qualifying 1–4 unit investment properties.

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Is there a seasoning requirement before refinancing a rental property?

Yes. Under Ei8ht Street Funding's current guidelines:

• Properties originally acquired using financing generally require approximately 3 months of ownership seasoning.

• Properties purchased entirely with cash generally require approximately 6 months of seasoning for applicable transactions.

Additional requirements may apply depending on the refinance structure.

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Can I use projected rent instead of an existing lease?

Depending on the transaction, qualifying market rent determined through the appraisal and applicable rental analysis may be used. The appraisal requirements typically include forms such as the 1004 or 1025 along with a 1007 rent schedule, depending on property type.

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How long is an appraisal valid for a DSCR loan?

Ei8ht Street Funding generally considers an appraisal valid for approximately 90 days, subject to underwriting and transaction circumstances.

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Can the property be vacant when I get a DSCR loan?

Vacant properties may be considered, but vacant units generally need to be rent-ready at closing. Property condition and rent-readiness can affect loan eligibility.

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Are rural properties eligible for DSCR financing?

Generally, no. Ei8ht Street Funding does not currently lend on properties classified as rural under applicable program guidelines. 

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Do DSCR loans have prepayment penalties?

Many investor DSCR loans include a prepayment structure.

A common Ei8ht Street Funding structure is a five-year 5% prepayment penalty, sometimes described as 5-5-5-5-5, although alternative structures may be available depending on the loan.

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Can a DSCR loan be made to a trust?

Trust eligibility depends on the structure. Ei8ht Street Funding does not lend to irrevocable trusts. Certain eligible revocable trust structures may require additional review and documentation.

 

Can I finance multiple rental properties?

Yes. Ei8ht Street Funding works with investors purchasing or refinancing multiple rental properties. There is no maximum number of DSCR loans you can have at any given time. For blanket loans, our Portfolio program generally contemplate investors with at least three properties, although exceptions may be available for qualifying two-property portfolios.

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Does a DSCR loan affect my personal credit?

A personal guarantor's credit is generally reviewed when underwriting a DSCR loan.

However, the property is being evaluated primarily as an investment-property transaction rather than through traditional owner-occupied mortgage qualification. We do not use hard inquiries for credit review on DSCR based loans. 

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Are DSCR loans only for residential properties?

While DSCR financing is commonly associated with 1–4 unit rental properties, Ei8ht Street Funding can also finance qualifying Multifamily properties 5-9 units

Loan structure and maximum leverage vary by property type.

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What documents do I need for a DSCR loan?

Documentation varies by transaction, but borrowers should generally be prepared to provide items such as:

• Completed loan application

• Government-issued identification

• Recent bank statements

• Entity documents

• EIN documentation

• Lease agreements, when applicable

• Insurance information

• Title information

• Appraisal

• Liquidity and reserve documentation

Because DSCR loans are designed for investors, the documentation process can be considerably different from a conventional owner-occupied mortgage.

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Does Ei8ht Street Funding offer DSCR loans nationwide?

Ei8ht Street Funding lends in most U.S. markets but does not currently lend in every state.

Certain states and rural properties are excluded under current program guidelines. Investors should confirm property eligibility before submitting a transaction.

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How do I get a DSCR loan quote from Ei8ht Street Funding?

Investors and mortgage brokers can submit a property and transaction to Ei8ht Street Funding for preliminary pricing.

Typical information needed includes:

• Property address

• Purchase price or estimated property value

• Requested loan amount

• Estimated monthly rent

• Borrower credit score

• Property type

• Purchase, refinance or cash-out transaction

• Investor experience, when applicable

All loans are subject to review and approval is not guaranteed.