What is a DSCR loan?
A DSCR loan is a business-purpose mortgage on income-producing residential property where the lender qualifies the rent, not your paycheck. The underwriter divides the property's monthly rent by its monthly principal, interest, taxes, insurance and HOA — the debt service coverage ratio — and lends if that number clears the program floor. There is no debt-to-income calculation, no tax return, no employment verification, and the loan closes in an LLC rather than your personal name.
THE NUMBERS
| Minimum DSCR | 0.75 (0.75–0.99 prices at +62.5 bps, 70% LTV cap) |
|---|---|
| Maximum LTV | 80% purchase or rate-and-term · 75% cash-out |
| FICO floor | 660 (below that the desk does not lend) |
| Loan size | $100K – $3M single · $10M portfolio |
| Reserves | 6 months PITIA · 12 months on a portfolio |
| Prepay options | 5-4-3-2-1 par · 3-2-1 +25 bps · 1-yr +50 bps · none +87.5 bps |
| Typical days to close | 21–30 days from a signed term sheet |
| Rate sheet | Silt Rate Desk — Market Composite Sept 2026 · effective 2026-09-01 |
ILLUSTRATIVE — published program floors, not a quote or a commitment to lend. Subject to underwriting, appraisal and final credit approval.
Why does the property qualify instead of the borrower?
A conventional mortgage asks whether your personal income can carry every debt you owe. A DSCR loan asks a narrower question: does this building pay for itself? That is a business credit decision, so the file is underwritten like one — the rent is the income, the PITIA is the expense, and the ratio between them is the approval. Your credit score still matters, because it prices the loan and evidences how you handle obligations, but your W-2, your K-1s and your write-offs do not enter the maths.
What makes it a business-purpose loan?
The property must be held for investment and cannot be occupied by the borrower or a family member. That single fact takes the loan outside the consumer mortgage rules — which is why there is no TRID Loan Estimate, no ability-to-repay test, and no 45-day consumer timeline. Every borrower signs a business-purpose affidavit at closing confirming the intended use of both the property and the proceeds. Occupying the property later is a breach of the note, not a technicality.
What does a DSCR loan look like in practice?
On Silt's sheet it is a 30-year loan, fixed or interest-only for the first ten years, sized to a maximum of 80% of value on a purchase or rate-and-term refinance and 75% on a cash-out. Loan sizes run from $100,000 to $3M on a single property and up to $10M across a portfolio. It closes in the name of your LLC, carries a prepayment structure you choose from a published menu, and is serviced like any other mortgage after closing.
What does it replace?
For most investors it replaces two things: the conventional investment mortgage they can no longer get because they have too many financed properties or too little taxable income on paper, and the hard-money note they are currently paying 10% on. It is not a substitute for a fix-and-flip loan on a gutted property with no rent — that is a bridge or rehab product — and it is not a commercial loan for a 40-unit building.
Where is the line?
One to ten residential units. Occupied or rent-ready. Rent that can be evidenced by a lease or the appraiser's rent schedule. A borrowing entity. Credit at or above 660 on Silt's floors, and a DSCR at or above 0.75 — with the low band capped at 70% leverage and priced 62.5 basis points higher. Outside that box, the answer is a different product, not a worse DSCR loan.
What are the trade-offs?
You give up a little rate and a little leverage compared with an owner-occupied conventional mortgage, and you accept a prepayment penalty unless you pay to remove it. You get speed, no income documentation, entity ownership and no cap on how many properties you finance. For an investor who is scaling, that trade usually favours DSCR — but price both before you decide.
The whole product in nine lines
| Property | Single-family rental, leased |
|---|---|
| Rent | $2,400 / mo |
| Taxes, insurance, HOA | $620 / mo |
| Loan amount | $240,000 at 75% LTV |
| Illustrative rate, FICO 745 | 6.625% |
| Principal + interest | $1,537 / mo |
| PITIA | $2,157 / mo |
| DSCR — $2,400 ÷ $2,157 | 1.11 |
| Result | Approvable · prices the 1.00–1.19 band |
That is the entire underwrite. No pay stub, no tax return, no debt-to-income. Illustrative figures from the current sheet — not a quote or a commitment to lend.
WHAT WE NEED FROM YOU
- Entity documents. Articles or certificate of formation, operating agreement, EIN letter.
- Lease or rent evidence. A signed lease, or the appraiser's Form 1007 rent schedule if vacant.
- Taxes, insurance and HOA. Current bills and an insurance binder naming the entity.
- Two months of bank statements. Reserves are six months of PITIA on a single property.
- Contract or payoff. The purchase contract if buying, the payoff statement if refinancing.
FREQUENT QUESTIONS
- Do I need to show tax returns?
- No. A DSCR file is underwritten on the property's rent, so no returns, pay stubs or employment verification are collected.
- Can I live in the property?
- No. It is a business-purpose loan and owner or family occupancy breaches the note.
- Does the loan appear on my personal credit?
- It closes in the entity's name. Reporting varies by servicer, and you will personally guarantee it either way.
- Is there a limit on how many I can have?
- Not on Silt's sheet. That cap is a conventional-mortgage rule, and it is the most common reason investors move to DSCR.
- How fast can it close?
- Typically 21 to 30 days from a signed term sheet, with the appraisal usually the longest item.
RELATED
TERMS IN THIS LESSON
PART OF DSCR ACADEMY → COURSE 1
IN THIS COURSE
- 1.1What is a DSCR loan?
- 1.2How DSCR is calculated
- 1.3Who DSCR loans are for
- 1.4DSCR vs conventional
- 1.5What a DSCR loan costs
- 1.6The eight documents
Last reviewed 6 September 2026 · Silt Capital lends on 1–10 unit residential DSCR only.