DSCR Loans for California Real Estate Investors (2026)
DSCR loans qualify the property, not you. Here's how they work, what the math looks like, and when they beat a conventional investment loan.
DSCR (Debt Service Coverage Ratio) loans are designed for investors: the lender qualifies the property, not you. No tax returns, no DTI, no employment verification. The rental income just needs to cover the mortgage payment.
The math
`` DSCR = Gross monthly rent ÷ Monthly PITI ``
A DSCR of 1.0 means rent exactly covers the payment. 1.25 means rent covers payment + 25% buffer. Most programs require DSCR ≥ 1.0 for best pricing; some accept 0.75 with rate hit.
Example: $3,000/mo rent ÷ $2,400 PITI = DSCR of 1.25. ✓ Qualifies easily.
Typical requirements
- FICO — 660+ for most programs, 700+ for best pricing
- Down payment — 20-25% (some programs 15% at high FICO)
- Loan amount — $100k to $3M+ depending on lender
- Property types — 1-4 unit, short-term rentals OK at some lenders, condos OK
- Reserves — 3-6 months PITI in liquid assets
When DSCR beats conventional
- You have multiple investments and DTI is tight — DSCR doesn't touch DTI
- You write off heavily and tax returns show low income — DSCR ignores tax returns
- You're scaling fast — Conventional caps at 10 financed properties; DSCR doesn't
- Short-term rental income — Some DSCR lenders use AirDNA estimates; conventional won't
When conventional beats DSCR
- Rate matters more than speed — Conventional rates run 100-150 bps cheaper
- You only have 1-2 properties — Conforming is easy + cheap
- Strong W-2 income covers the DTI math anyway
Short-term rental DSCR
For Airbnb/VRBO properties, lenders use either:
- 12 months of actual booking history, OR
- AirDNA / Rabbu projected revenue (less common, requires premium tier lender)
If you're buying NEW to short-term, you'll need to use long-term rent comps from an appraiser.
Have a property in mind? Run a free DSCR quote — we'll size it and show you the rate.