How DSCR Loans Work for Florida Rental Investors
If you own rental property, or want to, a traditional mortgage can be a headache. Lenders want tax returns, W-2s and a debt-to-income ratio, and your write-offs can make your income…
If you own rental property, or want to, a traditional mortgage can be a headache. Lenders want tax returns, W-2s and a debt-to-income ratio, and your write-offs can make your income look smaller than it really is. A DSCR loan takes a different approach: it qualifies the property, not your paycheck.
What Is a DSCR Loan?
DSCR stands for Debt Service Coverage Ratio. It compares the property's rental income to its monthly housing payment (principal, interest, taxes, insurance and any HOA). If the rent covers the payment, the property can support the loan, and that's what the lender cares about most.
For example, if a Broward rental brings in $3,000 a month and the full payment is $2,500, the DSCR is 1.2. The property earns 20% more than it costs to carry.
Who DSCR Loans Are Good For
- Self-employed investors whose tax returns don't show their true income
- Investors growing a portfolio who have hit conventional loan limits
- Buyers purchasing in an LLC
- Owners refinancing a rental to pull out cash for the next deal
What Lenders Look At
- Rental income: current leases or a market rent estimate from the appraisal
- Credit score: still matters, but programs are more flexible than conventional
- Down payment and reserves: you'll need skin in the game and some cash on hand
- Property type: single-family, 2–4 units, condos and some multi-family
DSCR Loans Are for Investment Properties Only
DSCR loans can't be used for a home you live in. They're built for rentals and business-purpose real estate. If you're buying a primary residence, ask us about FHA, VA, Conventional or Non-QM options instead.
How SFQMC Can Help
Through our network of 50+ wholesale lenders, we compare DSCR programs to find the right fit for your property and goals, with loans from $50K to $1.5M across Florida. See our Investment Property Loans page for more.
Ready to Talk About Your Deal?
Call South Florida Quality Mortgage at (954) 455-7625 or get pre-qualified online. Same-day response, no obligation and no credit pull to get started.
South Florida Quality Mortgage Corp. | NMLS #376794 | Equal Housing Lender. This article is general information, not a commitment to lend. All loans are subject to credit and property approval, and terms vary by borrower and property.