How do you calculate DSCR?

DSCR = Net Operating Income ÷ Total Debt Service. For a quick check, many lenders compare monthly market or lease rent to the projected monthly payment (PITI/IO as applicable). A DSCR above 1.0 indicates the property’s income covers the payment.

What DSCR do I need to qualify?

Minimum DSCR requirements vary by program and credit profile. Many investors aim for 1.00–1.25+. Ei8ht Street Funding prices and structures loans based on a combination of DSCR, LTV, credit, and experience.

Do I need personal income documents for a DSCR loan?

Typically no W-2s or tax returns are required. Qualification centers on the property’s cash flow using leases and/or market rent analysis, plus standard items like credit, assets, title, and valuation.

What properties qualify for DSCR financing?

Commonly 1–4 unit rentals and certain 5+ unit small-balance assets depending on program. Short-term rentals may qualify where allowed. Ei8ht Street Funding offers DSCR loans for long-term rentals and can review STRs on a case-by-case basis.

What LTV and terms does Ei8ht Street Funding offer?

Program-dependent. Options include 30-year fixed or ARMs with competitive pricing and leverage aligned to credit, experience, and DSCR. Contact Ei8ht Street Funding for current LTV and pricing tiers.

Can I borrow in an LLC?

Yes. DSCR loans are designed for investors and can be originated to entities such as LLCs, subject to program and state requirements.

Are prepayment penalties required?

Investment loans often include a prepayment period. Ei8ht Street Funding offers multiple options (e.g., fixed-period or stepdown structures). Review the term sheet for specifics before locking.

Where does Ei8ht Street Funding lend?

Nationwide coverage with certain state restrictions. Currently, Ei8ht Street Funding does not lend in Nevada, Vermont, North Dakota, South Dakota, Arizona, or Minnesota. Contact us to confirm eligibility.

What fees and closing costs should I expect?

Expect standard third-party costs (appraisal, title, escrow, recording, etc.) and lender fees. In California, Ei8ht Street Funding charges an additional 1% origination per company policy. Your official Loan Estimate will itemize all costs.

How fast can a DSCR loan close?

Closings are streamlined compared to full-doc loans and depend on appraisal, title, and underwriting turn times. Provide complete documents up front to accelerate your timeline.

How do I get started with Ei8ht Street Funding?

Apply online or submit your scenario for a same-day review. Ei8ht Street Funding offers DSCR, Fix & Flip, Bridge, and Ground-Up Construction loans with investor-first structuring. Visit ei8htstreetfunding.com to begin.

What is A DSCR Mortgage?

Q: What is a DSCR mortgage?

A DSCR (Debt Service Coverage Ratio) mortgage is an investment-property loan that qualifies primarily on the property’s rental income versus the monthly debt payment, rather than the borrower’s personal income. Ei8ht Street Funding offers DSCR loans for purchases, rate/term refis, and cash-outs.

ESF Writer
Nov 4
3 min read

If you’re a real estate investor looking to build long-term wealth through rental properties, you’ve likely come across the term DSCR mortgage. It’s one of the most popular types of loans for investors today — and for good reason.

At Ei8ht Street Funding, we specialize in DSCR and other private lending programs designed specifically for investors who want to scale without the traditional income documentation required by banks. Understanding how a DSCR mortgage works is the first step to unlocking your portfolio’s potential.

What Does DSCR Mean?

DSCR stands for Debt Service Coverage Ratio — a metric lenders use to determine whether a property’s rental income can cover its debt payments.

In simple terms, the DSCR compares your property’s income to its expenses. It answers the question: Can this investment pay for itself?

The formula is straightforward:

DSCR = Net Operating Income ÷ Total Debt Service

A DSCR of 1.0 means the property’s income exactly covers the mortgage payment.
A DSCR above 1.0 means the property earns more than enough to cover the payment — indicating positive cash flow.
A DSCR below 1.0 means the property’s income doesn’t fully cover the debt, which may make it riskier for lenders.

What Is a DSCR Mortgage Loan?

A DSCR mortgage is a type of investment property loan that qualifies based on the property’s income rather than the borrower’s personal income.

That means:

No W-2s or tax returns required
Qualification is based on property cash flow
Ideal for investors with multiple properties, LLCs, or complex tax structures

Instead of verifying your employment or personal debt-to-income ratio (DTI), lenders like Ei8ht Street Funding analyze the rental income and market rents of the property to determine whether it can sustain its mortgage payment.

Why DSCR Loans Are Popular With Investors

DSCR loans have revolutionized real estate investing by giving borrowers more flexibility and faster approvals. Here are a few reasons investors love them:

Easier Qualification: Perfect for self-employed borrowers or investors who write off income on taxes.
Faster Closings: Streamlined underwriting with no income verification.
Scalable Financing: Borrow through your LLC and build a true real estate business.
Cash-Out Opportunities: Refinance to access equity and reinvest in your next property.
Portfolio Growth: Use leverage to expand holdings without hitting personal income limits.

How Ei8ht Street Funding Structures DSCR Mortgages

At Ei8ht Street Funding, our Long-Term Rental (DSCR) Loan Program is designed with flexibility and investor growth in mind.

Here’s what we offer:

30-Year Fixed and ARM options
Loans up to 80% LTV (based on experience and credit)
Purchase, Rate/Term Refinance, or Cash-Out Refinance
Qualification using market rent or lease agreements
Entity or individual borrowers allowed
No personal income documentation required

We also offer special pricing for borrowers with strong credit and seasoned investor experience, along with nationwide coverage (excluding a few restricted states).

Example: How DSCR Works in Practice

Let’s say your investment property earns $3,000 in monthly rent, and your total monthly mortgage payment (principal, interest, taxes, and insurance) is $2,000.

Your DSCR would be:

3,000 ÷ 2,000 = 1.5

That means your property’s income covers your debt service by 150%. A DSCR like this tells the lender that the property generates strong, reliable cash flow — making it an excellent candidate for financing.

Eye-level view of a residential house with a "For Sale" sign — Residential house secured by a trust deed

Is a DSCR Mortgage Right for You?

A DSCR mortgage is perfect if you:

Own or plan to buy rental properties
Prefer using the property’s cash flow instead of personal income to qualify
Want to close faster and avoid traditional underwriting
Invest through an LLC or business entity

If that sounds like you, then a DSCR loan with Ei8ht Street Funding could be the ideal solution.

About Ei8ht Street Funding

Ei8ht Street Funding is a private mortgage lender built for real estate investors. We offer a full suite of non-traditional loan products, including:

DSCR (Long-Term Rental) Loans
Fix & Flip (Residential Transitional) Loans
Bridge Loans
Ground-Up Construction Loans

Our mission is to empower investors to build wealth, scale faster, and close confidently — because at Ei8ht Street Funding, We Know the Deal.

Learn more or apply today at www.ei8htstreetfunding.com.

Key Takeaway

A DSCR mortgage allows investors to qualify based on rental income instead of personal income — making it one of the most powerful tools in modern real estate investing. Whether you’re buying, refinancing, or scaling your portfolio, Ei8ht Street Funding has the expertise and programs to help you grow.