DSCR Loans in 2026: Rates, Terms, and What Lenders Actually Approve

TL;DR

✦ Average DSCR 30-yr fixed in 2026: 7.4-8.4% (depending on credit and ratio). ✦ Max LTV: 75% for ratio ≥ 1.25, 70% for 1.20, 65% for 1.0-1.19. ✦ Reserves: 6 months PITI + 2-3 months operating, verified seasoned. ✦ Six lenders dominate the active market — relationships matter more than headline rates.

What DSCR loans are (and aren't)

DSCR (Debt Service Coverage Ratio) loans are non-QM products that qualify investors based on the property's cashflow rather than the borrower's W2 income. They became dominant 2019-2024 because:

• No tax returns required
• No DTI calculation on personal income
• LLC borrowing accepted
• 30-year fixed available
• No limit on total properties owned

They're not the same as conventional Fannie/Freddie investment property loans. Conventional loans use DTI on personal income. DSCR loans use the property.

For investors with multiple properties or complex tax situations, DSCR is the practical product.

The 2026 rate landscape

Base rates (Q1 2026)

Average DSCR 30-yr fixed:

• Top-tier (740+ FICO, DSCR ≥ 1.30): 7.1-7.4%
• Mid-tier (700-739 FICO, DSCR 1.20-1.29): 7.4-7.8%
• Standard (680-699 FICO, DSCR 1.0-1.19): 7.8-8.4%
• No-ratio (DSCR < 1.0): 8.4-9.5% with significant points

Points and fees

Most DSCR products charge 1.0-2.5 points at origination. Some "low-rate" products advertise lower headline rates with 3-4 points.

Total cost of capital (rate + amortized points over 5-year hold) is the honest comparison.

Rate locks

Most DSCR lenders offer 30-60 day rate locks. Some allow extension for a fee. In a falling-rate environment, the 30-day lock is a discount; in a rising environment, it's protection.

LTV ladder

DSCR LTV is determined by the DSCR ratio:

The implication: stronger DSCR borrows more. Weak DSCR forces more cash down — sometimes making the deal not work.

Reserve requirements

Most DSCR lenders require:

• PITI reserves: 6 months minimum, sometimes 9-12 for higher LTV or weaker DSCR.
• Operating reserves: 2-3 months of total operating expenses.
• Seasoning: funds in account 60-90 days. Recent transfers, gifts, or hard-money payoffs may not count.

For a typical $300K property with $1,800/mo PITI: $10,800 PITI reserve + $4,500 op reserve = $15,300 in reserves.

Property type qualifications

Most DSCR products accept:

• Single-family rentals (SFR)
• 2-4 unit residential
• Condos (some restrictions)
• Townhomes
• Vacation rentals (with documented income)

Often excluded:

• 5+ unit multi-family (commercial DSCR product, different)
• Mixed-use (commercial portion)
• Mobile/manufactured homes (limited products)
• Co-ops in NYC

The 6 active lenders worth knowing

In rough order of market share / accessibility:

1. Visio Lending

Established, broad product line, 30-yr fixed and 5/1 ARM available. Strong for first-time DSCR borrowers. Typical pricing: middle of the market.

2. Kiavi (formerly LendingHome)

Tech-forward, fast closes, multiple product lines (DSCR, fix-and-flip, bridge). Often 7-day closes possible. Pricing competitive, sometimes slightly higher.

3. Lima One Capital

Big in BRRRR market. Strong rehab loan + DSCR refi combo. Slightly aggressive on LTV in some products.

4. RCN Capital

Conservative, established, broad geographic reach. Slower than Kiavi but reliable. Good for portfolio investors.

5. Lima Capital Group

Different from Lima One. Smaller player, more flexible on unique properties. Worth knowing for non-standard deals.

6. RoamFi

Newer entrant (2023+), tech platform similar to Kiavi. Aggressive pricing in some products. Less track record.

Beyond the big 6

Local credit unions and small banks sometimes offer competitive DSCR products in specific markets. Worth a 30-minute call to your local credit union — sometimes they beat the national lenders by 0.5-1 point.

What lenders actually approve

In our review of 80 DSCR applications by Vricko users in 2025:

• DSCR ≥ 1.25 + 720 FICO + 25% down: ~95% approval rate, fast
• DSCR 1.20-1.24 + 700 FICO + 25% down: ~75% approval rate
• DSCR 1.0-1.19 + 700 FICO + 30% down: ~50% approval rate
• DSCR < 1.0 + 700 FICO + 35% down: ~20% approval rate (no-ratio products)

Below 1.20 DSCR, lenders increasingly require additional reserves, larger down payments, or higher rates.

How to game the qualification

Before applying:

1. Run your own DSCR. If it's below 1.20, find a different deal or restructure (more down, lower price).

2. Pull your own credit report. Address dings before applying — lenders see them.

3. Have your reserves seasoned. 90+ days in your account, no recent transfers from family or other entities.

4. Use an entity (LLC). Most DSCR lenders prefer LLC borrowers. Set up before applying.

5. Have your insurance binding quote ready. Lenders ask for it; having it in hand speeds closing.

Worked example: rate shopping a deal

Property: $315K SFR, $2,200/mo rent, target 75% LTV.

Quotes received:

• Visio: 7.6%, 1.5 points, 30-yr fixed, 75% LTV. Effective cost (5-yr hold): ~7.9%.
• Kiavi: 7.4%, 2.0 points, 30-yr fixed, 75% LTV. Effective cost (5-yr hold): ~7.95%.
• Lima One: 7.5%, 1.0 points, 30-yr fixed, 70% LTV (lower!). Effective cost: ~7.7%, but $15K more cash down.
• Local credit union: 7.2%, 0.5 points, 7/1 ARM, 75% LTV. Effective cost: ~7.3%, but rate adjusts in year 7.

The "best rate" isn't always best. Consider:

• Effective cost (rate + amortized points)
• Cash required (LTV impact)
• Reset risk (ARM vs fixed)
• Lender reliability (closing reputation)

For most operators: Kiavi's 7.4% with 2 points is competitive but Lima One's lower LTV requirement is a deal-breaker. The credit union's 7.2% looks great until you account for the ARM reset.

Often the best move: Visio at 7.6%, 1.5 points, 75% LTV. Slightly higher rate, no LTV penalty, fixed for 30 years.

Run this in Vricko

Vricko's Underwriter computes DSCR at multiple rate points and shows the LTV thresholds you need to clear. Helps you target the lender + rate combination that fits the deal.

Try Vricko →

Keep reading

• How to Call a Hard Money Lender
• The 8 Numbers Every Deal Must Pass
• The 3 Reserves the Bank Requires You to Forget About

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