What do you need to qualify for a DSCR loan?

By Danté M. Shackelford, Founder and Managing Principal of EMx Lending
Updated November 5, 2026

Short answer

A DSCR loan qualifies on the property's rent, not your income, so you won't need tax returns or W-2s. Expect to put 20% to 25% down plus closing costs, have a credit score of at least 660 (700 or higher for the most leverage), show reserves in the bank, and close in an LLC.

How the DSCR test works

DSCR stands for debt service coverage ratio. It is the monthly rent divided by the full monthly payment: principal, interest, taxes, insurance and any HOA dues. A DSCR of 1.0 means the rent exactly covers the payment. Our program starts at 1.05, and a higher ratio gives you more room.

Example: a duplex bought for $145,000 renting for $2,300 a month comes out around 1.9. That qualifies easily and leaves real cash flow.

Credit score and leverage

Credit score	Purchase	Cash-out refinance
700 and up	Up to 80%	Up to 75%
680 to 699	Up to 75%	Up to 70%
660 to 679	Up to 65%	Up to 60%

Loans run from $75,000 to $2 million on 1 to 4 unit rentals, with 30-year terms.

Cash you'll need

Down payment: 20% at the top tier, more at lower scores or if you choose to put more in.
Closing costs: plan on roughly $5,000 to $10,000 on a typical small rental, depending on the market.
Escrows at closing: the first three months of principal and interest are collected up front, along with tax and insurance escrows.
Reserves: closing costs plus 3 months of the full payment on a purchase, or 6 months on a refinance, shown on two months of bank statements.

Documents

The list is short because we underwrite the property, not your paycheck:

Signed purchase agreement (or your settlement statement on a refinance)
Leases, if the property is rented
LLC documents: articles of organization, EIN letter and operating agreement. A brand-new LLC is fine.
Two months of bank statements
We pull credit and a background check, and order title and the appraisal

Many investors use one LLC per property. It isn't required, but most CPAs recommend it. If you need help setting one up, we can share templates.

How fast it closes

DSCR loans can close in as little as 14 days, and some have closed faster. Send a scenario and we can usually get you a term sheet the same day.

This is general education, not investment, legal or tax advice. Loan terms are general guidelines, depend on credit, experience and the property, are subject to change and are not a commitment to lend. EMx Lending makes business-purpose loans on non-owner-occupied investment property in all states except Vermont, North Carolina, North Dakota, South Dakota, Idaho, California, Arizona and Nevada.