DSCR (Debt-Service Coverage Ratio) loans are a powerful tool for brokers working with real estate investors. These loans qualify based on rental income rather than personal income, opening up new opportunities for clients with strong property cash flow. Through Morty, brokers gain access to top wholesale lenders offering competitive DSCR loan options.
For an overview of DSCR lending, visit our DSCR Loan explainer. You can also explore our top bank statement lenders, top INIT lenders, and top asset depletion lenders for other non-QM options.
Real-World Investor Scenario
Below are some real scenarios that illustrate how LOs are using DSCR loans today:
The repeat investor expanding their portfolio
A real estate investor owns three rental properties and is purchasing a fourth. The investor’s tax returns don’t reflect much income due to depreciation and write-offs, but the property itself generates strong rental cash flow.
Why DSCR is a good fit: The investor can qualify based on the property’s income, not personal tax documents. They can also hold the property in an LLC and potentially use rental income from multiple properties to support future purchases.
The short-term rental operator scaling their Airbnb business
A borrower has successfully managed two short-term rentals and is now under contract to buy a third. Traditional lenders don’t recognize their Airbnb income because it’s inconsistent and not well-documented on their taxes.
Why DSCR is a good fit: Some DSCR lenders allow qualification based on market rent or historical rental income—even for short-term rentals—enabling the borrower to continue growing their portfolio.
Top Lenders Offering DSCR Loans Through Morty
| Lender | Website | Highlights |
|---|---|---|
| Carrington | carringtonwholesale.com | Also offers DSCR, asset depletion, and 1099 programs. |
| JMAC | jmaclending.com | Wide non-QM product menu, including asset utilization and P&L options. |
| Loan Store | theloanstore.com | Offers fix & flip, bridge, and reverse mortgage programs. |
| Angel Oak | angeloakms.com | Full suite of non-QM options including foreign national loans. |
| NewFi | newfiwholesale.com | Known for flexibility and graduated payment programs. |
| Orion | orionlending.com | Full range of non-QM including ITIN and P&L support. |
| Champion Funding | championwholesale.com | Strong foreign national and no-ratio options. |
| Ardri | ardri.ai | Offers bridge, no-ratio, and HELOCs via bank statements. |
| BluePoint | bluepointmtg.com | Simple guidelines and wide product access. |
| PRMG | prmg.net | Offers 12- and 24-month bank statement programs with flexible overlays. |
| Plaza Home | plazahomemortgage.com | Recently added reverse mortgage access through Morty. |
What Underwriters Look for in DSCR Files
Lenders focus on the property’s income potential rather than the borrower’s personal finances. The key metric is the DSCR:
DSCR = Gross Monthly Rent / Monthly PITIA (Principal, Interest, Taxes, Insurance, and Association Dues)
For example, if you have a rental income of $3,500 and your monthly PITIA is $2,800, your monthly obligation is $3,500 / $2,800 = 1.25. A DSCR of 1.25 means that rental income is 25% greater than monthly expenses—generally considered a strong ratio.
Lenders typically require a DSCR of 1.0–1.2 or higher. A ratio above 1.0 indicates positive cash flow.
Other submission tips:
- Some lenders may require a lease agreement or rental analysis (like a Form 1007).
- Property must be rent-ready; major repairs or vacancies may disqualify the file.
- Strong credit and reserves are a plus.
Why Brokers Are Key in DSCR Lending
Retail lenders typically don’t offer DSCR loans. Most DSCR programs are accessible through wholesale channels—which means brokers are the key to unlocking these opportunities for investor clients. Morty gives you access to multiple DSCR lenders in one place.
Frequently Asked Questions
Can I use a DSCR loan for short-term rentals or Airbnb properties?
Some lenders allow DSCR loans for short-term rental properties, but guidelines vary. You’ll often need to provide proof of consistent rental income, sometimes using platforms like AirDNA or historical rental data.
How fast can DSCR loans close?
DSCR loans can often close in 2–3 weeks, especially with clean documentation and a rent-ready property. Morty’s fulfillment support helps streamline the process from submission to close.
Can the property be held in an LLC or other entity?
Yes—many DSCR programs allow the borrower to be an LLC or corporation, which is especially useful for real estate investors managing multiple properties.
Do borrowers need income documentation?
Not for qualification purposes. DSCR loans are based on the property’s rental income, so personal income documentation is not required. However, some lenders may still review credit, assets, and reserves.
What credit score is needed for DSCR loans?
Minimum credit scores vary but typically start around 620–660. Strong reserves and a higher DSCR can offset a lower score with some lenders.
Morty Advantage for DSCR Loans
With Morty, brokers can:
- Access top DSCR lenders through a single platform
- Use our Point-of-Sale to manage and submit investor deals
- Rely on our Processing & Fulfillment team to support fast timelines
- Use Rosey AI to match borrower profiles with the right lender
Ready to get started? Talk to sales to access these programs and more.
