A DSCR loan lets you buy an investment property that qualifies on the rental income the property will produce, not on your personal income, tax returns, or job. If the rent covers the payment, the deal can work, and you can borrow up to 80 percent of the purchase price with an interest-only option available.

I am Manny Solana with California Home Solution, and this is one of my favorite programs to explain, because most people have no idea it exists.

What is a DSCR loan?

DSCR stands for debt service coverage ratio. In plain English, it is the rent divided by the housing payment. If a property rents for more than it costs to carry each month, it “covers,” and that is what the lender is approving. We do not pull your tax returns or your W-2s, and we do not use your debt-to-income ratio. The property has to carry the deal, not your paycheck. Industry guidelines in 2026 generally look for a ratio of 1.00 or higher, with 1.25 and up unlocking the best pricing.

Who is this actually for?

This is built for people who have capital and want to put it to work. You do not even need to own a home already. If you have the down payment and decent credit, you can buy a rental, keep renting where you live if you want, and become a landlord on the property’s own income.

How much can you borrow, and what does it cost?

You can typically go up to 80 percent of the purchase price on a purchase, so 20 to 25 percent down. Rates move with the market and with your specific file, but as a snapshot, a standard investor file in mid-2026 has been pricing near the high 6 percent range on a 30-year structure. The payment can also be interest only, which keeps more cash in your pocket each month while the rent does the work.

A real example with numbers

I love giving people numbers, so here is a clean one.

Buy a property for 1,000,000 dollars and put 25 percent down. That is a 750,000 dollar loan. At an example rate of 6.75 percent, interest only, the principal and interest payment is about 4,218 dollars a month. Add property taxes of roughly 1,041 dollars a month, based on about 1.25 percent of the price, and insurance of about 250 dollars. That brings your total to around 5,500 dollars a month.

Now go rent that same property. In many California markets a home at that price rents for at least 7,000 dollars. That is roughly 1,500 dollars of positive cash flow every month, and you qualified without ever using your personal income.

What about taxes?

This is where it gets even better. As the owner of an investment property, you can take depreciation, which is a paper deduction that can offset rental income. I am a former CPA, so I love this part, but I will still tell you the same thing I tell everyone: talk to your own tax advisor about how depreciation applies to your situation.

The bottom line

If you have money sitting still and you have been told you cannot qualify to buy because of how your income shows on paper, a DSCR loan may be the door. The property qualifies itself. Send me the address or the numbers on something you are looking at, and I will run it for you.

Manny Solana California Home Solution NMLS #291475 Company NMLS #260091 818-999-6070

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Frequently Asked Questions

Do you need personal income to qualify for a DSCR loan?

No. A DSCR loan qualifies on the property’s rental income, not your personal income, tax returns, or employment. If the rent covers the payment, the file can work.

How much can you put down on a DSCR loan?

Typically 20 to 25 percent, since most programs allow up to 80 percent loan-to-value on a purchase.

Can a DSCR loan be interest only?

Yes. An interest-only option is commonly available, which lowers the monthly payment and improves cash flow.

Do you have to own a home to get a DSCR loan?

No. You can buy an investment property with a DSCR loan even if you rent where you live.

What credit score do you need for a DSCR loan?

Programs generally start around a 640 to 660 FICO, with better pricing and higher leverage above 700.