Quick Summary: A DSCR loan lets an investor buy or refinance a rental property based mostly on the rent it brings in, not personal income. Lexington Capital's general guidelines are a 650 credit score, 15% to 20% down, rent that covers the payment (a DSCR around 1.0 to 1.4 or more) and an investment property, not the home you live in. Terms include 30-year fixed or adjustable options for long-term and short-term rentals.
If you're self-employed or you already own a few rentals, you know the problem: your tax returns don't always tell the story a lender wants to hear. A DSCR loan looks at the property first.
What DSCR Means, in Plain Words
DSCR stands for debt service coverage ratio. It's a simple question: does the rent cover the payment?
Divide the monthly rent by the full monthly payment, meaning the mortgage, property taxes, insurance and any association fee.
- Rent of $2,600 and a full payment of $2,000 gives a DSCR of 1.3.
- Rent of $2,000 and a full payment of $2,000 gives a DSCR of 1.0.
Lenders generally look for a DSCR around 1.0 to 1.4 or more. The higher the number, the more room the property has.
What Lexington Capital Generally Looks For
Under Lexington's general guidelines, which can change:
- A credit score of 650 or higher.
- 15% to 20% down.
- Rent that covers the payment, a DSCR around 1.0 to 1.4 or more.
- An investment property. A DSCR loan isn't for the home you live in.
Options include 30-year fixed or adjustable terms, for both long-term and short-term rentals.
Carlos and Lucía own their home in Perth Amboy and one two-family house they rent out. Carlos is a self-employed contractor, so his tax returns show a modest income after deductions. They found a second two-family with rents that cover the full payment with room to spare. A DSCR loan lets the property's rent do the qualifying. (This is an illustration, not a real client.)
Kevin helps you get ready and submits the application. Lexington Capital makes the decision.
Who It Fits
- Investors growing a rental portfolio.
- Self-employed people and business owners whose income is hard to show on paper.
- Investors using the buy, renovate, rent and refinance approach.
Run the Numbers With Room to Spare
A property that barely covers its payment has no cushion for an empty month, a new roof or a tenant who pays late. Before you buy, plan for:
- At least a month or two without rent each year.
- Repairs and maintenance.
- Property taxes and insurance going up.
If the deal still works with those surprises in it, it's worth a closer look.
Note: Financing is provided by Lexington Capital, not by Kevin Gaviria or Gaviria Life Insurance Solutions. Kevin is a referral partner of Lexington Capital, not a lender, and may receive a referral fee. Lexington Capital reviews every application and makes all credit decisions. Not every applicant is approved.
When it's time to apply, Kevin sends you a private upload link for your documents. Please don't text or email bank statements, tax returns or credit reports.
A Simple Next Step
Take the 2-minute program check and choose the property option, or see what a rental loan takes. You can also call or text Kevin at (848) 212-8787.
FAQs: DSCR Loans
Approval is based mainly on the rent the property brings in, not your personal income, which is why these loans help self-employed investors.
Lexington's general guideline is a DSCR around 1.0 to 1.4 or more, meaning the rent covers the full monthly payment.
Generally 15% to 20%.
No. It's for investment properties. For the home you live in, a HELOC may be the option to look at.
Yes. There are options for both long-term and short-term rentals.