If you’re a real estate investor searching for financing options that focus on your property’s income rather than your own, you’ve likely heard of DSCR loans. These unique loans assess the cash flow from a rental property instead of requiring extensive personal income documentation.
But a common question remains: What banks do DSCR loans, and how can you find the right lender? In this guide, we’ll explore which financial institutions offer DSCR loans in 2025, how they work, and what you need to know before applying.
Benefits of DSCR Loans
DSCR loans are popular among property investors for several reasons:
- No personal income verification required
- Fast and flexible approval process
- Ideal for self-employed borrowers or those with complex income structures
- Suitable for single-family rentals, multifamily units, and vacation rentals
This makes them an excellent choice for scaling a real estate portfolio without being limited by W-2 income or tax returns.
What Banks Do DSCR Loans in 2025?
While traditional banks have been slower to adopt DSCR loans, several institutions and specialized lenders now offer them. Some are national lenders, while others are private companies focused specifically on real estate financing.
Here are some of the most active DSCR loan providers:
Kiavi
Kiavi is a leading private lender specializing in real estate investor loans. They offer DSCR loans for both short-term and long-term rental properties. Their approval process is streamlined and based primarily on the property’s performance.
Borrowers appreciate Kiavi for its fast turnaround, minimal documentation requirements, and investor-friendly terms. Their programs support single-family rentals, small multifamily properties, and portfolios.
Lima One Capital
Lima One Capital provides DSCR loans for long-term rentals, short-term rentals, and portfolios. Their loans are designed to be flexible and scalable, making them ideal for investors looking to build or refinance real estate holdings.
They typically require a minimum DSCR of 1.0 and a down payment of 20 to 25 percent, with loan amounts ranging from small individual properties to multi-million-dollar portfolios.
CoreVest Finance
CoreVest offers rental property loans for both individual investors and large-scale operators. Their DSCR products are suitable for both short-term and long-term investment strategies. CoreVest is known for customizing terms to fit the borrower’s portfolio and market strategy.
With competitive interest rates and a reputation for working with professional investors, CoreVest has become a go-to lender for serious real estate players.
Angel Oak Mortgage Solutions
Angel Oak is a non-qualified mortgage (non-QM) lender that provides DSCR loans as part of a broad portfolio of alternative lending products. They are a strong option for borrowers who do not meet traditional lending criteria but have investment properties with solid income streams.
Angel Oak is known for being flexible with credit history and documentation, which makes them appealing to first-time investors and seasoned pros alike.
First National Bank
Some regional and community banks, such as First National Bank, have started offering DSCR loans. While not all branches participate, and terms may vary, it’s worth exploring these options if you have a strong relationship with your local banker.
These banks may offer slightly more competitive interest rates but could require more documentation compared to private lenders.
How to Qualify for a DSCR Loan
To qualify for a DSCR loan, you’ll need to demonstrate that your investment property can generate sufficient income to cover the monthly debt service.
Key qualifications include:
- DSCR Ratio: Minimum typically starts at 1.0, though some lenders accept as low as 0.75 with higher rates or reserves
- Credit Score: Most lenders require a minimum score of 620 to 680
- Down Payment: Ranges from 20 to 25 percent
- Property Type: Can include single-family residences, condos, townhouses, duplexes, triplexes, and small multifamily units
- Experience: Some lenders prefer investors with prior rental experience, though many accept first-time investors
Income verification is based on actual or expected rental income, which may be determined through lease agreements, appraisals, or third-party data.
Real-World Example
Consider the case of Sarah, an investor in Georgia who owns two short-term rentals. As a self-employed entrepreneur, she struggled to qualify for conventional loans due to variable income. She turned to a DSCR loan from a private lender that evaluated her Airbnb income rather than her tax returns.
Her properties each had a DSCR of over 1.25, which easily met the lender’s requirements. She closed within 21 days and used the financing to expand her rental business by purchasing a third property.
This is a classic example of how DSCR loans help investors leverage cash flow rather than personal income.
DSCR Loan vs Conventional Loan: Key Differences
Here is a side-by-side comparison to help understand how DSCR loans differ from traditional mortgage products:
| Criteria | DSCR Loan | Conventional Loan |
|---|---|---|
| Income Requirement | Based on property income | Based on personal income (W-2 or tax returns) |
| Documentation | Minimal | Extensive financial records required |
| Speed of Approval | Faster | Slower |
| Property Use | Investment only | Primary, second home, or investment |
| Flexibility | High | Moderate to low |
| Down Payment | Typically 20 to 25 percent | As low as 3 to 5 percent in some cases |
How to Choose the Right DSCR Lender
With multiple options available, choosing the right DSCR lender requires careful comparison. Here are tips to guide your decision:
- Check their minimum DSCR requirements
- Understand their acceptable property types (long-term vs short-term rentals)
- Compare down payment and interest rate terms
- Ask about prepayment penalties or fees
- Evaluate closing speed and customer service
Some lenders may specialize in short-term rentals, while others cater to long-term residential investments. Selecting a lender that aligns with your strategy is key.
Conclusion
In 2025, the answer to what banks do DSCR loans is expanding, but the majority of accessible and flexible options still come from private or non-bank lenders. Institutions like Kiavi, CoreVest, Lima One, and Angel Oak lead the market with investor-centric programs, while some regional banks are slowly entering the space.
For real estate investors, especially those with strong property cash flow and less traditional income documentation, DSCR loans can be a powerful tool to finance new purchases or refinance existing properties. These loans offer a faster, more adaptable path to growing your investment portfolio.
Choosing the right lender involves understanding their terms, assessing the property’s income potential, and aligning the financing with your long-term investment strategy. With preparation and research, a DSCR loan could be the next smart move in your real estate journey.
FAQs
What banks offer DSCR loans near me?
Most DSCR loans are provided by private or non-bank lenders. However, a few regional and community banks do offer them. It’s best to check with banks that specialize in investment real estate.
Can I get a DSCR loan with a credit score below 650?
Yes, some lenders accept credit scores as low as 620. However, you may face higher interest rates or need to provide a larger down payment.
Do I need to own an LLC to qualify?
No, but some investors choose to purchase property through an LLC for tax and liability purposes. Many lenders allow individuals or entities to apply.
Can I use short-term rental income to qualify?
Yes, though not all lenders accept short-term rental income. Those that do often require documentation such as Airbnb income history or projections from market data tools.
How long does it take to close on a DSCR loan?
Closing time varies by lender but usually takes between 14 to 30 days. Private lenders tend to move faster than traditional banks.
Introducing Emily Parker, a seasoned professional with over 5 years of expertise in DSCR loans. With her extensive knowledge and experience in the field, Varsha has consistently demonstrated a deep understanding of DSCR loan intricacies and a proven track record of delivering successful outcomes for her clients.
