Before you apply for a DSCR loan, you need to know exactly where you stand on credit, down payment, reserves, and the property's income. This guide covers every requirement — including the FICO pricing tiers that most lenders won't publish.
Credit Score Requirements
The minimum FICO score for most DSCR programs is 620. But your score doesn't just determine eligibility — it drives rate pricing and maximum LTV. Here's exactly how credit tiers affect your deal:
| FICO Tier | Max LTV (Purchase) | Max LTV (Cash-Out) | Rate Impact |
|---|---|---|---|
| 740+ | 80% | 75% | Best available pricing |
| 720–739 | 80% | 75% | Near-best pricing |
| 700–719 | 80% | 75% | Mid-tier pricing |
| 680–699 | 80% | 75% | Standard pricing |
| 660–679 | 75% | 70% | Standard + small adj. |
| 640–659 | 75% | 65% | Rate adjustment applies |
| 620–639 | 70% | Not available | Highest rate tier |
The score used is the middle score of the three major bureaus (Equifax, Experian, TransUnion). For co-borrowers, the lower of the two middle scores is used.
DSCR Ratio Requirements
The DSCR ratio is calculated as Monthly Gross Rent ÷ Monthly PITIA. The minimum ratio for standard programs is 1.0x. How that number affects your loan:
- 1.25x and above: Strongest tier — best pricing, maximum LTV available, smoothest underwriting
- 1.10–1.24x: Strong qualifier — standard terms, no limitations
- 1.0–1.09x: Minimum qualifier — may require slightly higher reserves or lower LTV at some lenders
- Below 1.0: Standard programs won't qualify. A No-Ratio DSCR program skips the income test entirely — higher FICO and down payment required
Rent source matters: The DSCR calculation uses the lesser of the current lease amount or the appraiser's market rent opinion from the Form 1007. If you have a below-market tenant, the appraiser's market rent may actually help you qualify at a higher DSCR.
Down Payment Requirements
Minimum down payment on a DSCR purchase is typically 20% (80% LTV). However, the actual requirement depends on your FICO score and DSCR ratio. A 620 FICO or DSCR below 1.10 may require 25–30% down.
For cash-out refinances, the maximum is 75% LTV — meaning you must retain at least 25% equity after pulling cash out.
Reserve Requirements
Reserves are liquid assets you must have remaining after the down payment and closing costs. Most DSCR lenders require:
- Purchase: 6 months of PITIA in reserves
- Cash-out refinance: 12 months of PITIA in reserves
- Multiple investment properties: 2–6 months per additional financed property (lender-specific)
Eligible reserve sources: checking, savings, money market, stocks/bonds (at 70% of current value), retirement accounts (at 60–70%), and business accounts (documented as accessible). Gifts do not count toward reserves.
Property Requirements
DSCR loans are investment property only — the borrower cannot occupy the property. Eligible property types:
- Single-family residences (SFR) — most programs, best terms
- 2–4 unit properties (duplex, triplex, fourplex)
- Condos — warrantable and non-warrantable (program-specific)
- Townhomes
- Short-term rentals / Airbnb (STR DSCR program)
Rural properties, manufactured homes, co-ops, and commercial properties are generally not eligible for standard DSCR programs.
Entity and LLC Borrowing
DSCR loans close in LLCs, S-Corps, and trusts at identical rates and terms to personal-name loans. This is one of the most significant advantages over conventional financing, which requires personal-name borrowing on investment properties. Required for entity borrowing:
- Operating agreement or articles of organization
- EIN documentation
- Resolution authorizing the loan (some lenders)
- Personal guarantee from the member(s)
Pre-Application Checklist
Before you apply, have this ready:
- ✅ Credit score pulled (know your middle score first)
- ✅ Property identified and rent confirmed (lease or market rent estimate)
- ✅ Down payment sourced and seasoned (60+ days in account)
- ✅ Reserve funds documented
- ✅ LLC documents prepared (if borrowing in entity)
- ✅ DSCR calculated — use the free calculator
- ✅ Property insurance quote obtained
Use the DSCR calculator to run your ratio before applying, and see the rate table to understand where your FICO/LTV combination lands on pricing.