Fund your next Rental Property with Rose Gold Lending
DSCR Rental Loans
660
Up to 80%
30
Year Fixed, ARM and IO options available
1-4 & 5-10
$3M
What is a DSCR Rental Loan?
A DSCR loan, short for Debt Service Coverage Ratio loan, is a type of real estate loan where the lender evaluates the loan’s feasibility based on the rental income generated by the property, rather than the borrower’s personal income. This loan focuses on the property’s ability to cover its own mortgage payments and operating expenses, making it a popular choice for real estate investors.
How do I calculate DSCR?
To calculate the Debt Service Coverage Ratio (DSCR) for a property on a monthly basis, divide the property’s monthly rental income by its monthly Principal, Interest, Taxes, Insurance, and Association fees (PITIA). This ratio is used by lenders to determine if the property’s rental income adequately covers its monthly mortgage and related expenses. For example, if a property has a monthly rental income of $2,000 and monthly PITIA expenses of $1,500, the DSCR would be 1.33 ($2,000 ÷ $1,500), indicating that the rental income sufficiently covers the expenses and exceeds them by a third.
