DSCR (Debt Service Coverage Ratio) is the loan investors reach for once they're serious. It qualifies on the property's rent — not your personal tax returns.
The math: DSCR = Gross monthly rent ÷ Total monthly PITIA (principal, interest, taxes, insurance, association). A DSCR of 1.0 means the property pays its own mortgage. Most programs want 1.0+, but strong programs also exist for sub-1.0 ratios with a rate adjustment.
The advantage over conventional investor loans: no tax returns, no personal DTI calculation, and you can close in an LLC. If your Schedule E write-offs make your paper income modest, DSCR is often the only path to keep buying.
Rates run slightly above conventional but are competitive — especially for the flexibility. Down payments are typically 20-25%, and reserves of 6+ months per property are common.
DSCR is not just for long-term rentals. Short-term rental income (Airbnb, VRBO) qualifies on many programs — either from 12 months of history or from an AirDNA / third-party projection.
The scale advantage: no cap on the number of financed properties. Fannie Mae's 10-property limit doesn't apply to DSCR. That's why serious investors move here around property 5-7.