Long-term rental financing

DSCR Rental Loans

Financing for stabilized rental property, assessed on what the asset earns.

Offered Term Sheet within 12-24 hours

A rented apartment building with its lease, a key and the rent it produces

What a DSCR Rental Loan Is

A DSCR loan is underwritten primarily on the property's income rather than your personal earnings. For investors holding rental property, that keeps the focus where it belongs: on whether the asset services the debt. It suits portfolios, cash-out refinances on stabilized property, and buyers who want long-term financing on an income-producing asset.

DSCR stands for debt service coverage ratio. It compares the rent a property brings in with its monthly payment. If the rent covers the payment, the property carries itself, and that is the main question a DSCR loan asks. Apex qualifies these loans on the property's cash flow, with no traditional employment or personal-income verification.

That makes it a common fit for self-employed investors, owners whose tax returns show heavy write-offs, and anyone adding properties faster than a bank's debt-to-income limits allow. Loan amounts run from $100K to $3M+, with 30-year fixed and ARM options.

A DSCR loan is not a hard money loan. Hard money is short-term money for a project, paid off within months when the property is sold or refinanced. A DSCR loan is long-term financing for a property that is rented or ready to rent, and it is often the loan investors refinance into after a hard money purchase and rehab.

Key Highlights

Qualified on the property's cash flow, not your personal income
No traditional employment or personal-income verification
Cash-out refinance LTV up to 80%
Loan amounts from $100K to $3M+
30-year fixed and ARM options, DSCR as low as 0.75x
Long-term and short-term rental properties eligible
Transparent, competitive rates — no hidden fees

How a DSCR Loan Works, Step by Step

01
Estimate the rent
For a purchase, use the lease in place or market rent for similar units nearby. For a refinance, use the current lease. Short-term rental income can be supported by AirDNA data, the property's own history or appraiser-supported short-term rental comparables, depending on the program.
02
Estimate the payment
Add principal and interest, property taxes, insurance and any HOA dues. That total is PITIA, the monthly cost of carrying the property.
03
Work out the ratio
Divide the monthly rent by PITIA. A result of 1.00 means the rent covers the payment exactly. Apex can go as low as 0.75x, and maximum leverage calls for 1.00x and a 700 FICO.
04
Send the scenario
Share the address, the purchase price or value, the rent and the loan you want. A term sheet comes within 12 to 24 hours.
05
Appraisal and underwriting
The appraisal confirms the value and, usually, the market rent. Credit, entity documents, insurance and title are reviewed. Purchases and rate-and-term refinances need reserves.
06
Close and hold
The loan closes on a 30-year fixed or ARM structure. On a cash-out refinance, the equity you take out, up to 80% LTV less the existing loan and costs, comes to you at closing.

Who It Suits

Investors buying or refinancing stabilized rental property
Owners releasing equity from an income-producing asset
Borrowers building a portfolio of rental properties
Investors whose personal income does not reflect the asset's performance

Common Uses

Buying a long-term rental property
Cash-out refinance to fund the next purchase
Refinancing out of a short-term hard money or bridge loan after a rehab
Financing a short-term or vacation rental
Adding properties to a growing rental portfolio
Buying or refinancing in the name of an LLC

When Another Loan Fits Better

If the property needs a renovation before it can be rented, a fix and flip or bridge loan usually comes first, and a DSCR loan refinances it once it is leased.

If you need a loan for a home you will live in, this is not it. These are business-purpose loans for investment property only.

What We Look At

The property leads the review. These are the parts of a DSCR file that carry the most weight.

01

Assessed On The Asset

The property's rental income leads the assessment.

02

Held For The Long Term

Structured for holding rather than a short project cycle.

03

Portfolio Friendly

Works for a single property or a growing group of them.

How DSCR is calculated

DSCR is the property's gross monthly rent divided by its monthly PITIA: principal, interest, taxes, insurance and any HOA dues. It asks one question: does the property cover its own payment?

Take a property renting at $2,400 a month against a payment of $1,450 principal and interest, $310 taxes, $95 insurance and $45 HOA, or $1,900 in total. $2,400 ÷ $1,900 is a DSCR of 1.26, so the rent covers the payment with room to spare. The same property at $1,900 rent would sit at 1.00, and at $1,500 it would be 0.79, where the rent no longer covers the payment and the file is reviewed on its own merits.

The figures above are an illustration of the arithmetic, not an offer of terms.

Leverage and credit

Maximum leverage is 80% LTV across purchase, rate-and-term and cash-out, and reaching it calls for a minimum 700 FICO and a DSCR of 1.00x.

Maximum LTV: 80%, across purchase, rate-and-term and cash-out
For maximum leverage: Minimum 700 FICO and 1.00x DSCR
Loan amounts: $100K to $3M+
Structures: 30-year fixed and ARM
Income verification: None. The property's cash flow is what is underwritten

Reserves and seasoning

Reserves are generally not required on a cash-out refinance where the property is fully occupied and half the cash-out proceeds equal at least six months of PITIA.

Purchases and rate-and-term refinances do require reserves.

Short-term rentals

Short-term and vacation rentals are eligible. Income can be supported by AirDNA data, the property's own operating history, or appraiser-supported market rent using short-term rental comparables. Which of those applies depends on the program.

Prepayment and vesting

Prepayment: Step-down options, with a buyout available
Where it applies: Only in states that permit a prepayment penalty
Vesting: An LLC or other entity is generally preferred; personal vesting is also welcome

A Sample Cash-Out Refinance, Worked Through

The figures are invented to show the arithmetic on the stated maximums. Your own terms depend on the property, the appraisal and your credit, and are shown on your term sheet.

Appraised value: $350,000
Maximum loan at 80% LTV: Up to $280,000
Existing loan to pay off: $150,000
Cash out, before closing costs: Up to $130,000
Monthly rent (fully occupied): $2,600
Assumed monthly PITIA on the new loan: $2,250
DSCR ($2,600 ÷ $2,250): 1.16x

At 1.16x the rent covers the payment with room left over, and the ratio clears the 1.00x needed for maximum leverage. Reaching the full 80% also takes a FICO of 700 or higher.

Reserves: on a cash-out refinance of a fully occupied property, reserves are generally not required when half the cash-out equals at least six months of PITIA. Half of $130,000 is $65,000, and six months of PITIA is $13,500, so this example meets the test.

If the rent were $2,000, the DSCR would be 0.89x. That is still inside the program, which goes as low as 0.75x, but it would not qualify for the 80% maximum, so the loan amount would be set lower and reviewed deal by deal.

All financing programs, rates, leverage, terms, and closing timelines are subject to lender guidelines, underwriting approval, property eligibility, satisfactory due diligence, and borrower qualifications. A preliminary review or quote is not a commitment to lend.

DSCR Rental Loan FAQs

Is a DSCR loan the same as a hard money loan?

No. Hard money loans are short-term, usually a year or two, and are paid off by a sale or a refinance. A DSCR loan is long-term rental financing with 30-year fixed and ARM options. Both lean on the property rather than your paycheck, which is why many investors use hard money to buy and fix a property, then refinance into a DSCR loan to hold it.

Do you verify my income for a DSCR loan?

No traditional employment or personal-income verification is required. The loan is qualified on the property's cash flow, meaning its rent compared with its monthly payment. Your credit, the property itself and reserves where they apply are still reviewed.

What DSCR do I need?

The program goes as low as 0.75x, which means the rent covers 75% of the payment. To reach maximum leverage of 80% LTV, the property needs a DSCR of 1.00x and you need a minimum 700 FICO.

How much cash can I take out on a refinance?

Cash-out refinances go up to 80% of the appraised value. Your cash is that amount less the existing loan and closing costs. Reaching 80% calls for a 700 FICO and a 1.00x DSCR. Loan amounts run from $100K to $3M+.

Can I use a DSCR loan for an Airbnb or other short-term rental?

Yes. Short-term and vacation rentals are eligible. Income can be supported by AirDNA data, the property's own operating history, or appraiser-supported market rent from short-term rental comparables. Which method applies depends on the program.

Can I close in my LLC?

Yes. An LLC or other entity is generally preferred, and personal vesting is also welcome. Either way, the loan is business-purpose financing for investment property.

What are the rates, and is there a prepayment penalty?

Rates depend on the deal, including leverage, DSCR, credit and the structure you choose, so they are quoted on the term sheet, which comes within 12 to 24 hours. Prepayment options are step-down, with a buyout available, and they apply only in states that permit a prepayment penalty.

Do I need reserves for a DSCR loan?

Purchases and rate-and-term refinances require reserves. On a cash-out refinance, reserves are generally not required if the property is fully occupied and half of the cash-out proceeds equal at least six months of PITIA.

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