Best DSCR Mortgage Lenders, According to Experts

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This type of loan lets investors purchase property with less documentation, though rates may be higher. 

If you’re looking for a mortgage for an investment property, a conventional loan can be cumbersome, requiring you to qualify for funding based on your income. Luckily, several non-traditional mortgage options, such as asset-based mortgages and debt service coverage ratio – or DSCR – loans, can be particularly beneficial to investors.  

“DSCR programs allow for much less documentation from a borrower, which makes them an ideal product for investors with multiple properties in their portfolio or those looking for a reduced doc approach. Eliminating the need for personal income documents, including tax returns, also allows for a more streamlined process,” said Brian Shahwan, vice president, mortgage banker and broker at William Raveis Mortgage in New York. 

While qualifying for these loans may be easier in some respects, they can also come with higher interest rates and more stringent repayment requirements. Read on to learn more about DSCR loans, who they are best for and our top picks for lenders offering this kind of mortgage. 

Quick Winners List

• Best for Interest-Only Loans: Angel Oak Mortgage Solutions
• Best for No Ratio DSCR Loans: A&D Mortgage
• Best for Competitive Interest Rates: Kiavi
• Best for Multi-Family Properties: Truss Financial Group
• Best for High Loan Amounts: Griffin Funding

Best for Interest-Only loans: Angel Oak Mortgage Solutions

Pros: 

• Offers multiple non-QM loans, including DSCR loans
• Available to permanent and non-permanent U.S. residents
• Interest-only loan options are available 
• High LTV ratio

Cons: 

• Higher credit score requirements for max LTV
• Max of five loans allowed with lender

Nitty Gritty: Angel Oak Mortgage Solutions is a great choice for non-traditional borrowing, offering a variety of non-traditional qualification loans, including bank statement loans, asset-based mortgages and DSCR loans. Its DSCR loan offers flexible terms, with no ratio options available. Loans are available from $100,000 to $3 million, with repayment terms such as interest-only offered. No personal income or employment information is required to qualify. However, you’ll need a minimum credit score of 680, with a 720 score required to access the maximum loan-to-value (LTV) ratio. 

Best for No Ratio DSCR Loans: A&D Mortgage

Pros: 

• No ratio DSCR loans available
• First-time homebuyers allowed
• Low minimum credit score requirement
• Quick closing time 

Cons: 

• Minimum of three months’ cash reserves required to qualify for DSCR loan
• Minimum 20% down payment

Nitty Gritty: A&D Mortgage offers flexible financing for investors, with a DSCR loan featuring accessible terms. Namely, there is no DSCR requirement for investors seeking a no-ratio loan. Plus, with a DSCR over 1.25, borrowers may qualify for a credit. Its DSCR loan is also available to first-time homebuyers and for mixed-use and multi-family properties with up to eight units. A&D requires a minimum FICO score of 620 to qualify for this type of mortgage, which is lower than many competitors, but you may need a higher score for loans with a DSCR of less than 1. 

Best for Competitive Interest Rates: Kiavi

Pros: 

• Competitive interest rates
• No prepayment penalty after third year
• Interest-only options available 
• Option to check your rate online

Cons: 

• Minimum credit score not disclosed
• Not available for mixed-use properties

Nitty Gritty: Kiavi is an online lender with a technology-powered platform aimed at streamlining the loan application process and providing transparency to borrowers. It focuses on loans for real estate investors, offering fix-and-flip, rental and new construction mortgages – including DSCR loans. In addition to favorable terms, including interest-only options and no prepayment penalties after the third year, Kiavi offers competitive interest rates on its DSCR loans, including both 30-year fixed rates and multiple adjustable-rate mortgages. 

Best for Multi-Family Properties: Truss Financial Group

Pros: 

• Get a personalized quote with no commitment 
• Flexible loan terms available
• No minimum DSCR ratio
• Loans available for properties with up to 12 units

Cons: 

• Minimum credit score requirement not disclosed
• Property criteria may apply

Nitty Gritty: Truss Financial Group boasts flexible loan terms and qualification requirements, offering multiple non-QM loans for self-employed individuals and real estate investors. Eligibility requirements for its DSCR loans are no exception, with no minimum DSCR ratio and multiple loan terms available. The lender also supports purchasing multi-family properties with up to 12 units, more than many other lenders on this list. While Truss doesn’t disclose its minimum credit score requirement for this type of loan, borrowers can get a customized quote without documentation or commitment. 

Best for High Loan Amounts: Griffin Funding

Pros: 

• DSCR loans available on all property types, including multi-family properties
• Offers jumbo DSCR loans up to $20,000,000
• Fixed and ARM rates available 
• Online DSCR calculator available 

Cons: 

• Not available in all states
• High minimum credit score requirement for some loans

Nitty Gritty: Though perhaps best known for its VA loans, Griffin Funding offers a variety of loan types, including bank statement loans, asset-based mortgages and DSCR loans. The lender offers flexible terms on its DSCR loans, with fixed and adjustable-rate mortgages available at various lengths. Griffin also offers jumbo DSCR loans of up to $20,000,000 – a big plus for investors targeting high-end properties. The lender provides DSCR loans for all properties, including multi-family properties and short-term rentals, though qualification requirements may vary. 

What is a DSCR Mortgage?

“DSCR, which stands for Debt Service Coverage Ratio, is a home loan product most suitable for the purchase or refinance of an investment property. Borrowers can benefit from a DSCR program as it allows for qualifying solely based [on] the current or future rental income the property could produce, rather than the borrower’s personal income. This also eliminates the need for any personal income documents, including tax returns,” said Shahwan. 

Essentially, DSCR mortgages use the income-generating potential of a property to measure the investor’s ability to repay the loan, rather than the borrower’s income. That means you can often qualify with a lower credit score and minimal income documentation. 

This nontraditional lending model has pros and cons. On the one hand, it can be easier for investors to qualify without significant personal income or assets. On the other hand, this kind of loan can come with higher interest rates and down payments. 

“[Lenders] typically only offer DSCR mortgages at lower loan to value (LTV) ratios and at higher interest rates than more traditional mortgages. This is because the collateralizing asset stands alone, whereas the more traditional mortgages take the borrower’s full financial wherewithal into consideration. With this increase in risk, it only makes sense that DSCR mortgages are for less LTV and higher interest rates,” explained David Gottlieb, wealth manager at Savvy Advisors.

Gottlieb and Shahwan recommend working closely with an expert mortgage advisor to ensure you find a set of terms that works for your needs if you are considering this type of loan. 

Why You Should Trust Us

Emily Sherman has been a personal finance journalist covering topics including mortgages for the past seven years. In addition to consulting lender websites for details about mortgage offerings, she relies on industry experts to ensure the information presented is accurate. 

Methodology 

To evaluate the best DSCR mortgage lenders, we compared lenders based on factors including rates, fees, credit score requirements and customer service. Since DSCR loans are non-traditional mortgages, we prioritized offerings available to those with lower credit scores. 

Customer support was also a crucial feature. We analyzed data from sources including TrustPilot and the Better Business Bureau to ensure lenders were available, responsive and helpful in resolving borrowers' queries. We also looked at down payment requirements, prepayment penalties, and other loan features. Read our full methodology here. 

FAQ

Sources

• David Gottlieb, wealth manager at Savvy Advisors
• Brian Shahwan, vice president, mortgage banker and broker at William Raveis Mortgage