Question 1

Is a DSCR loan better than a conventional loan for real estate investors?

Accepted Answer

A DSCR loan can be better than a conventional loan for real estate investors who want to qualify based on rental income instead of personal income. DSCR loans focus on the property’s cash flow, while conventional loans require tax returns, W-2s, and debt-to-income calculations.

Question 2

What does DSCR stand for in real estate loans?

Accepted Answer

DSCR stands for Debt Service Coverage Ratio. It measures whether a property’s rental income is sufficient to cover its monthly mortgage payment. A DSCR of 1.0 means the rent covers the payment, while higher ratios indicate stronger cash flow.

Question 3

Do DSCR loans require tax returns or income verification?

Accepted Answer

Most DSCR loans do not require tax returns, W-2s, or traditional income verification. Qualification is based primarily on the rental income of the property rather than the borrower’s personal income.

Question 4

Are DSCR loan interest rates higher than conventional loans?

Accepted Answer

DSCR loan interest rates are typically higher than conventional loan rates. This is because DSCR loans are designed for investors and use alternative qualification methods that carry different risk profiles.

Question 5

Can first-time real estate investors use DSCR loans?

Accepted Answer

Yes, many lenders allow first-time real estate investors to use DSCR loans. Some programs do not require prior landlord experience, making DSCR loans accessible for newer investors.

Question 6

What credit score is required for a DSCR loan?

Accepted Answer

Most DSCR loan programs require a minimum credit score between 620 and 680, depending on the lender, loan-to-value ratio, and property cash flow.

Question 7

Are DSCR loans available in Michigan?

Accepted Answer

Yes, DSCR loans are available in Michigan and are commonly used for rental properties, short-term rentals, and investment real estate across the state.

Question 8

Is a DSCR loan good for short-term rental properties like Airbnb?

Accepted Answer

Many DSCR loan programs allow short-term rental properties, including Airbnb and vacation rentals. Qualification may be based on market rent or projected short-term rental income, depending on the lender.

[keyword

[keyword]

Mortgage Made Simple

Michigan Mortgage Solutions Blog For Buyers, Homeowners & Investors

Buy a House with Student Loans Michigan: 2026 Guide