DSCR Rental Property Loans for California Investors

Traditional lenders qualify you on your tax returns, W-2s and debt-to-income ratio. For many investors, especially self-employed borrowers or anyone with several properties, that’s where the deal falls apart.

A DSCR loan works differently. It qualifies the property on the rent it brings in, not on your personal income. No tax returns, no pay stubs, no employment verification. If the property’s rent supports the payment, you can finance it.

Talk to Seth: (415) 860-7384

Loan Terms at a Glance

Rates and terms are subject to change and depend on the property, borrower and lender approval. Loans are for business purposes and investment properties only, not for owner-occupied homes.

What Is DSCR?

DSCR stands for debt service coverage ratio. It compares the property’s monthly rent to its monthly housing payment, including principal, interest, property taxes, insurance and any HOA dues.

• DSCR above 1.0: the rent more than covers the payment
• DSCR of 1.0: the rent covers the payment exactly
• DSCR below 1.0: the rent covers most of the payment, and you make up the difference

Many lenders require 1.0 or higher. Seth works with lenders who will consider properties below 1.0, which helps in high-value California markets where rents don’t always keep pace with prices.

Example: How the Numbers Work

Say you’re buying a $600,000 rental home that rents for $4,000 a month.

• Loan at 80% LTV: $480,000
• Down payment: $120,000
• Monthly payment including taxes and insurance: about $3,600
• DSCR: $4,000 ÷ $3,600 = 1.11

The rent covers the payment with room to spare, so the property qualifies on its own. Your personal income never enters the picture.

Figures are illustrative only. Actual payments depend on the rate, loan structure, taxes, insurance and lender approval.

Estimate your numbers with our Loan Calculator →

Who This Loan Is For

• Self-employed investors whose tax returns don’t reflect their real income
• Investors growing a portfolio who have hit conventional loan limits
• Short-term rental and Airbnb owners
• Investors who want to hold property in an LLC
• Flippers refinancing a finished project into a long-term rental

Why Work with Seth Swenson Mortgage Capital

Seth has worked in private money lending since 2003, including more than 25 years living and working in the San Francisco Bay Area. As a licensed California broker with access to over 50 private lenders, he compares DSCR programs across lenders to find the rate, term and prepayment structure that fits how long you plan to hold the property.

Frequently Asked Questions

Do I need to show tax returns or pay stubs?

No. DSCR loans are qualified on the property’s rental income, not your personal income. No tax returns, W-2s or employment verification are required.

What if the rent doesn’t fully cover the payment?

Properties with a DSCR below 1.0 can still qualify. Terms may be adjusted, so talk to Seth about the specific property.

Can I close in my LLC?

Yes. Many investors close in an LLC for liability protection. You can also close in your own name.

Do you finance Airbnb and short-term rentals?

Yes. Short-term rentals are eligible, along with single-family homes, condos and 2–4 unit properties.

Is there a prepayment penalty?

Most DSCR loans have one, but you can choose the structure, such as a 5-year or 3-2-1 step-down. Buyout options are also available if you expect to sell or refinance early.

Can I refinance a property I just renovated?

Yes. Many investors use a DSCR loan to refinance out of a fix and flip loan once the property is rented. Seth can plan both loans from the start.

What if I need short-term financing instead?

Bridge loans qualify based on the property’s equity alone, with no income or rent requirement. They’re useful when you need to close fast and refinance later. See Fix and Flip Loans or call Seth to discuss.

Do you finance larger apartment buildings?

Yes. For five or more units, see our Multifamily Investment Loans.

Ready to Finance Your Rental?

Call Seth at (415) 860-7384 or send a message with the property address, purchase price or current value, and the expected monthly rent. He’ll tell you quickly whether it qualifies.