Who are DSCR loans for — and who should not use one?
A DSCR loan fits anyone whose rental pays for itself but whose tax return does not tell that story: self-employed and write-off-heavy investors, landlords past the conventional financed-property limit, buyers who need to close in an LLC, foreign nationals, and BRRRR operators refinancing out of a bridge. It is the wrong product if you intend to live in the property, if the building is not rent-ready, or if you qualify comfortably for an owner-occupied conventional loan and simply want the lowest rate available.
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.
The self-employed investor
The most common profile. Depreciation, Section 179 and legitimate business deductions push taxable income down, which is excellent tax planning and fatal to a debt-to-income underwrite. A DSCR loan never looks at the return, so the write-offs cost nothing. If you have been told 'your income doesn't support it' while your properties cash flow, this is the product that was built for you.
The landlord who has run out of conventional slots
Agency guidelines limit how many financed properties one borrower can carry, and lenders often stop well before the guideline does. DSCR has no such cap on Silt's sheet — the eleventh property is underwritten exactly like the first, because the test is the building's rent. Portfolio borrowers can also consolidate five or more doors onto one blanket note with one payment.
The entity buyer and the partnership
Conventional investment loans generally close in a personal name. Every DSCR loan closes in an LLC or corporation, which is why partnerships, JVs and asset-protection structures use it by default. Members guarantee the loan personally, so the entity is a title and liability structure rather than a way to escape recourse. Whether the entity should be single-member or multi-member is a question for your CPA and attorney.
The foreign national and the new arrival
No Social Security number, no US credit file and no US tax return are required, because none of them are inputs. Foreign-national files cap at 70% LTV and price 75 basis points higher on the current sheet. Non-permanent residents on a visa are underwritten as US borrowers with visa documentation. Both close in an entity like everyone else.
The BRRRR operator
Buy with cash or a bridge, renovate, lease, then refinance onto thirty-year DSCR paper and recycle the capital. The DSCR loan is the exit, and it is the step that determines whether the strategy works — which is why the sizing should be run before the purchase, not after the rehab. Seasoning rules and cost-basis treatment decide how much comes back out.
Who should not use one
Four cases. If you will occupy the property, a DSCR loan is not available at any price. If the property is uninhabitable or mid-gut, there is no rent to qualify — that is a bridge or fix-and-flip loan until the work is done. If you are buying a 40-unit building or true commercial space, this is the wrong sizing framework. And if you are a salaried buyer with clean returns and a single rental, a conventional investment loan will usually be cheaper; price both before choosing.
The same deal, two borrowers
| Property | $400,000 single-family rental, leased at $2,900 |
|---|---|
| Borrower A — salaried, one rental, clean returns | Conventional investment loan likely cheaper |
| Borrower B — self-employed, 9 financed doors | Conventional unavailable; DSCR approves on the rent |
| DSCR at 75% LTV, FICO 745 | ≈ 1.12 |
| Illustrative rate | 6.625% grid + 0.25% band = 6.875% |
| Result for Borrower B | Approvable without a tax return |
Same building, same rent, two different answers — because the two products ask different questions. Illustrative only.
WHAT WE NEED FROM YOU
- Entity documents. Formation papers, operating agreement and EIN letter.
- Photo ID or passport. Passport for a foreign national; no SSN is required.
- Lease or rent evidence. Or the appraiser's rent schedule on a vacant unit.
- Two months of bank statements. Six months of PITIA in reserves, twelve on a portfolio.
FREQUENT QUESTIONS
- Can a first-time investor get a DSCR loan?
- Yes. Experience is not a floor on Silt's sheet, though a first file benefits from a stronger ratio and cleaner reserves.
- Can two partners borrow together?
- Yes, through a jointly owned entity, with each significant member guaranteeing the loan.
- Can a trust take title?
- Structures vary; bring the trust documents early and confirm the arrangement with your attorney.
- Does a recent bankruptcy disqualify me?
- Not automatically. Seasoning since the event drives eligibility — tell the desk the date up front.
- Do I need landlord experience for a short-term rental?
- Not on the sheet, but STR files price 37.5 basis points higher and qualify on twelve months of documented revenue.
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.