If you’ve been turned down by a traditional bank because your W-2 income doesn’t reflect your true financial strength as a real estate investor, you’re not alone. Countless successful investors have faced this frustrating roadblock. They are rejected not because their properties don’t have cash flow, but because lenders focus on personal income instead of investment performance. Self-employed entrepreneurs, Airbnb operators, and portfolio investors know this pain.
The Debt Service Coverage Ratio (DSCR) loan changes everything. With this investor-focused financing solution, your rental income qualifies you. No tax returns, paystubs, or income verification, just the property’s cash flow potential. At theLender: “Your Rental Income is Your Qualification.”
Since 2019, theLender has funded over $3 billion in loans for real estate investors who understand traditional lending wasn’t built for them. This guide will walk you through our DSCR loan application process, from preparation to closing. You’ll learn the required documents, how to fill out each section, and what to expect so you can apply confidently and focus on building your portfolio.
Understanding DSCR Loan Fundamentals
Debt Service Coverage Ratio (DSCR) is a calculation that determines if your property’s projected rental income can cover the total mortgage payment, including principal, interest, taxes, and insurance (PITI). If the rental income equals or exceeds the mortgage payment, the property qualifies for financing.
Here’s a straightforward example: If your monthly rent is $3,000 and your monthly PITI payment is $2,500, your DSCR is 1.20 ($3,000 ÷ $2,500 = 1.20). Since this exceeds 1.0, the property qualifies! It’s that simple; no personal income analysis required.
This investor-first advantage eliminates the biggest barrier in traditional lending: personal income verification. With a DSCR loan from theLender, there are no W-2s, tax returns, or paystubs required. The loan is underwritten based purely on the property’s cash flow potential. This approach is ideal for self-employed individuals, gig workers, and investors whose wealth is tied up in assets rather than paychecks. Our flagship NONI (No-Income, No-Interview) program embodies this philosophy; it is not just a loan product, but a complete financial approach for modern real estate investors.
With a DSCR loan, we analyze the property, not your personal paycheck. This is how you finance like an investor, not a homeowner.
Step 1: Gather Your Essential Documents and Information
A DSCR loan application requires less documentation than conventional financing, but proper preparation is crucial for fast closings that could be in 30 days. This section is your checklist to streamline the process.
Core Borrower & Guarantor Information
We don’t verify personal income, but we need standard identification and credit information from anyone personally guaranteeing the loan:
- Full Legal Name, Social Security Number, Date of Birth, and Current Address: Ensure everything matches your government-issued ID exactly.
- Government-Issued Photo ID – Driver’s license or passport (both sides for license)
- Credit Report Authorization – We don’t verify income, but credit history is crucial. The lender uses the highest mid-FICO score among all borrowers to maximize your qualification potential.
- Real Estate Owned (REO) Schedule – A complete list of all properties you own, including addresses, values, and existing mortgage balances.
Subject Property Details
The property is the star of your DSCR loan application. Gather these details:
- Full Property Address – Include unit numbers for multi-family properties
- Property Type – Single-family, duplex, triplex, fourplex, condo, or townhome (we finance up to 8 units)
- For Purchases: Fully executed Purchase and Sale Agreement with all addendums
- For Refinances: Current mortgage statement and homeowners insurance declaration page
- Current Lease Agreements – If the property has existing tenants (for long-term rentals)
For Entity Vesting (LLCs, Corporations, Trusts)
Savvy investors use LLCs, S-corps, and trusts for asset protection, and theLender embraces this strategy. For entity-held properties, you’ll need:
- Articles of Organization or Incorporation – The official formation documents
- Operating Agreement or Corporate Bylaws – Internal governance documents
- Certificate of Good Standing – Recent state certificate showing the entity is in good standing
- EIN Documentation – IRS letter confirming your Employer Identification Number.
We accommodate complex LLC structures and require only 25% ownership in the borrowing entity. This offers exceptional flexibility for sophisticated investors with layered asset protection strategies.
Step 2: DSCR Loan Application
This is your guided tour of the application. This walkthrough gives you a head start and helps you approach each section confidently, while your Loan Officer will assist you.
Section 1: Loan & Property Information
This opening section establishes the foundation of your request. Specify your Loan Type (Purchase, Rate/Term Refinance, or Cash-Out Refinance), requested Loan Amount, and confirm all subject property details from your checklist. TheLender offers loan amounts up to $3.5 million, accommodating starter properties to luxury investments.
Unlike conventional lenders, DSCR lenders don’t require ownership “seasoning.” You can complete a cash-out refinance immediately after purchase. The only requirement is that proceeds must be used for business purposes, such as property improvements, acquiring investments, or other business needs. This flexibility is a major advantage for active investors looking to maximize capital efficiency.
Section 2: Borrower & Guarantor Details
Input the personal information from your preparation checklist. The personal guarantee is a standard requirement for business-purpose loans because it ensures you have skin in the game and demonstrates your commitment to the investment’s success. However, this personal guarantee does not trigger the need for personal tax returns, paystubs, or income verification. We’re establishing your identity and creditworthiness, not your personal earning capacity.
Section 3: Assets
The asset section serves a specific purpose: verifying you have enough funds for the down payment, closing costs, and required reserves (post-closing liquidity). List your liquid assets including:
- Bank Statements – Checking and savings accounts
- Brokerage Accounts – Investment accounts and securities
- Retirement Accounts – 401(k)s, IRAs (if accessible for investment)
Unlike most lenders who scrutinize every deposit, we do not require sourcing for large deposits. We understand that active investors move capital frequently between accounts, properties, and opportunities. This practical approach eliminates weeks of documentation requests that plague traditional lending.
Section 4: Declarations & Disclosures
This compliance section requires your attestation to key facts that keep your loan compliant:
- Business Purpose Declaration: You certify that this loan is for business or investment purposes, not personal use.
- Non-Owner Occupancy Confirmation: You’ll confirm this is an investment property only and that you won’t live in the property as your primary residence.
- Accuracy Attestation: Standard certification that all information is true and correct to the best of knowledge.
These declarations protect you and theLender by ensuring the loan meets all regulatory requirements for business-purpose financing.
Step 3: Proving Your Property’s Income Potential
This step is the heart of your DSCR loan application and showcases the lender’s expertise. The goal is to accurately project your property’s gross rental income to calculate a strong DSCR. Unlike traditional lenders with limited options, we offer multiple pathways to establish income potential.
For Long-Term Rentals (LTRs)
The income verification process for long-term rental properties is straightforward:
- If Currently Tenanted: Provide the current, signed lease agreement. We’ll use the actual rent amount for direct qualification.
- If Vacant: An appraiser will complete Form 1007 (Single-Family Comparable Rent Schedule), analyzing local rentals to determine fair market rent. This assessment ensures you are not leaving money on the table with conservative estimates.
TheLender Advantage for Short-Term Rentals (STRs)
Financing STRs like Airbnb and VRBO properties remains a challenge with traditional lenders, but theLender’s specialized expertise is invaluable. We’ve developed innovative methods for establishing STR financing income, giving you the best chance at qualification.
- Method 1: STR-Specific Appraisal – Our network includes appraisers experienced with vacation rental markets. They complete Form 1007 for short-term/vacation rental use, providing market rent estimates based on nightly and weekly rental comparables instead of traditional monthly rentals.
- Method 2: AirDNA Reports – We accept 12-month revenue projections from AirDNA Reports, the industry standard for STR market analysis. We apply a 20% expense factor for platform fees and vacancy, and the property must achieve a minimum market score of 60 (exceptions exist for strong deals).
- Method 3: Actual Operating Income – If your property has been operating as an STR, we can use 12 months of documented rental income from platforms like Airbnb, VRBO, or direct bookings. This method works well for refinances of established STR properties.
- Method 4: Alternative STR Market Rental Analysis – This streamlined option uses a simplified approach where an appraiser determines market potential based on daily rate and occupancy percentage. This method is effective and often faster than traditional approaches.
If any initial rent projection seems conservative, you can submit additional comparable properties or request a second opinion. TheLender will use the highest valid figure among all assessments. This approach demonstrates our commitment to getting your deal approved rather than finding reasons to decline it.
What Happens After Submission? The Path to Closing
After you submit your DSCR loan application, you’ll get a dedicated Loan Officer and Account Manager as your single point of contact. This team approach ensures nothing falls through the cracks while providing expert guidance.
- Initial Review & Pre-Approval: Your loan team conducts an initial review of your application, often issuing a pre-approval letter within 24 hours. This speed allows you to move quickly on investment opportunities and demonstrates serious intent to sellers in competitive markets.
- Underwriting & Appraisal: Once you decide to proceed, your file moves to our underwriting team while we order the property appraisal. Our underwriters verify property eligibility, entity documentation (if applicable), and confirm your liquid assets for closing. The appraisal establishes property value and rental income potential using the methods in Step 3.
- Conditions & Clear to Close: The underwriter may issue “conditions,” which are requests for clarification or additional documentation. Your dedicated Account Manager helps you understand and clear these conditions quickly, maintaining momentum toward closing. Once all conditions are satisfied, you receive “Clear to Close” (CTC) authorization.
- Closing: The final step involves signing loan documents with a title or escrow company. Our process targets closing within 30 days of application, and many of our loan programs feature “NO LENDER FEES,” providing significant cost savings compared to traditional lending.
Common Questions About the DSCR Loan Application Process
Can I get a DSCR loan as a first-time real estate investor?
Absolutely! TheLender’s programs are designed for first-time investors. We understand everyone starts somewhere, and our DSCR loans focus on the property’s potential rather than your existing portfolio size. This levels the playing field and helps new investors begin their wealth-building journey with the same financing tools as experienced professionals.
Do you lend on rural properties?
Yes, we accept properties on up to 20 acres with no reduction in Loan-to-Value (LTV). This unique feature sets us apart from other lenders who reduce LTV for larger parcels. This flexibility opens opportunities for investors interested in rural markets, hobby farms, or properties with significant land value.
Can I use income from an Accessory Dwelling Unit (ADU)?
Absolutely. We recognize the growing trend of ADUs and will include rental income from up to 3 ADUs per single-family property. This maximizes your qualifying income and acknowledges modern housing trends where savvy investors create multiple income streams from a single property.
What is the maximum LTV I can get?
We offer up to 85% LTV on purchases up to $1 million, maximizing leverage on your investment property financing. This high LTV reduces your cash requirement and improves your ROI by minimizing the capital tied up in each deal.
Are Foreign Nationals eligible to apply?
Yes, we welcome international investors through our Foreign National DSCR program. This program has specific documentation requirements and opens our lending to qualified foreign investors in U.S. real estate.
What if I want to finance more than 4 properties?
There’s no limit on the number of properties you can finance with theLender. For portfolios with 4+ properties, an additional board review is required. For larger portfolios, consider our theBlanket portfolio loan, which can finance 3-25 properties under a single loan, simplifying your financing structure and potentially reducing costs.
Conclusion
The DSCR loan application process at theLender is different because it’s built for real estate investors. We bypass the personal income verification maze, embrace complex scenarios like STR properties and LLC ownership, and maintain a streamlined process for speed without sacrificing thoroughness. Our focus is on analyzing the property’s cash flow potential so you can focus on building a profitable portfolio.
Successful real estate investors know the right financing partner can mean a growing portfolio or missed opportunities. At theLender, we don’t just process loans; we provide the financial infrastructure to finance like an investor, not a homeowner.