Program

DSCR Loans for Real Estate Investors

Investor Cash Flow

The investor loan that qualifies on the property, not the person. Rent covers the payment, no traditional income documentation is needed, and the loan can close in an LLC.

DSCR ≥ 1.01–8 UnitsLLC OKNo Income Docs

At a glance

Loan amounts
To $3M
Max LTV
80%
Min DSCR
DSCR: 1.0+ with options below 1.0
Units
1–8
DSCR = monthly rent ÷ monthly payment (PITIA). At 1.0 the property carries itself; ratios below 1.0 price in the Cloudy suite with a lower LTV.

What Is a DSCR Loan?

A DSCR loan is an investment property mortgage that qualifies primarily using the property's rental income rather than the borrower's traditional personal income. DSCR stands for Debt Service Coverage Ratio and compares the property's qualifying monthly rent to its monthly housing payment.

Who Are DSCR Loans For?

Buy-and-hold investors scaling a portfolio — no limit on financed properties
First-time investors buying eligible 1–4 unit rental properties
Short-term-rental investors (Airbnb/VRBO) with eligible 1–4 unit properties
Investors vesting in an LLC or corporation
Foreign nationals and ITIN borrowers (Passport suite)
“Skip the W-2s and tax returns. If the property's rental income supports the payment, DSCR can provide another way to qualify — with LLC vesting available.”
How to pitch it to your borrower

How Does a DSCR Loan Work?

What the file needs — and how we get to a number.

01The ratio

Gross monthly rent (lease or the appraiser's 1007 market rent) divided by principal, interest, taxes, insurance, and HOA.

02Assets & reserves

Down payment, closing costs and applicable reserves are verified based on the loan scenario.

03Credit

Tri-merge report on the guarantor. Housing events and any-FICO files route to the Cloudy suite.

04Vesting

Individual, LLC, or corporation. Entity docs and a personal guaranty for entity vesting.

DSCR Loan Requirements

Investment property, 1–8 units; DSCR of 1.0 or higher for standard pricing (lower ratios in the Cloudy suite at reduced LTV)
Qualifying rent from the lease or the appraiser's market-rent analysis (Form 1007); short-term rentals per the matrix
Down payment, closing costs and applicable reserves documented
Tri-merge credit report on the guarantor; minimum FICO per the matrix (any-FICO files route to Cloudy)
Vesting as an individual, LLC, or corporation (entity docs and a personal guaranty for entity vesting)

Requirements follow the current Sky TPO matrices and guidelines; see the matrix for each suite below.

Sky TPO DSCR Loan Programs

Each suite sets the occupancy, loan amounts, and matrix — pick the one that fits the property.

Breezy

Investment · DSCR & Full/Alt DocDSCR 1–4 Unit, DSCR 5–8 Unit, and ITIN DSCR 1–4 Unit — investor cash flow.
DSCR 1–4 Unit — DSCR ≥ 1.00, DSCR .99–.75 & No Ratio Below .75MatrixGuidelines
DSCR 5–8 Unit — DSCR ≥ 1.00MatrixGuidelines
ITIN DSCR 1–4 UnitMatrixGuidelines

Cloudy

Equity DSCREquity DSCR 1–8 Unit — no minimum FICO or DSCR.
Equity DSCR — No Minimum FICO or DSCRMatrixGuidelines

Sky Plus

Closed-End SecondsAn extra boost of equity: standalone seconds, first-lien rate untouched.
DSCR — Closed-End SecondsMatrixGuidelines

Passport

Foreign NationalForeign National DSCR 1–4 Unit — no U.S. credit required.
DSCR 1–4 Unit — Foreign NationalMatrixGuidelines

Real-World DSCR Scenarios

Scenario 01

Fourplex in Texas

$780K purchase, rents of $6,800 against a $5,900 payment — DSCR 1.15. 75% LTV, closes in the investor's LLC.
Scenario 02

Airbnb cabin

Market rent from the appraisal qualifies the property; 12 months of platform income supports it. DSCR 1.22 at 70% LTV.
Scenario 03

Cash-out on a paid-off rental

Investor pulls $350K from a free-and-clear duplex to fund the next down payment; DSCR 1.40.

Frequently Asked Questions About DSCR Loans

What is a DSCR loan?

A DSCR loan qualifies an investment property on its own rental income instead of the borrower's personal income. DSCR — debt service coverage ratio — is the qualifying monthly rent divided by the monthly housing payment.

How is DSCR calculated?

Gross monthly rent (the lease or the appraiser's market rent) divided by the total monthly payment — principal, interest, taxes, insurance, and HOA. A 1.00 ratio means the rent exactly covers the payment.

What is the minimum DSCR required by Sky TPO?

Breezy offers DSCR options at 1.0 and above, as well as options below 1.0 for eligible 1–4 unit properties. Additional options are available through the Cloudy suite.

Are tax returns required?

Traditional personal income documentation such as W-2s and tax returns is generally not required for DSCR qualification, subject to applicable Sky TPO program guidelines.

Can first-time investors qualify?

Yes. First-time investors may qualify on eligible DSCR programs, subject to current program requirements.

Can a DSCR loan close in an LLC?

Yes. Individual, LLC, or corporate vesting is allowed; entity vesting requires entity documents and a personal guaranty.

Can short-term rental income be used?

Yes, on eligible DSCR programs. Qualifying income requirements vary by property and program; refer to the current matrix for details.

Are Foreign Nationals eligible?

Yes — foreign national investors use the DSCR path through the Passport suite; no U.S. credit required.

Are prepayment penalties available?

Prepayment penalties may be available depending on the program, property and state requirements. Refer to the applicable matrix or your account executive for current options.

Have a DSCR scenario?

Price it in Sky Port in minutes or send it to the Scenario Desk.