← Building Cashflow / Single-family rentalsThe first door · Year 3 · Deep dive
DSCR loans: what underwriters actually check
Not your income. Six things on the property, in the order they look.
1 min
A DSCR loan is underwritten against the property's income, not yours — which is why it is the natural financing step at Year 3, when your W-2 stops being able to carry the next door.
The number
DSCR = net operating income ÷ annual debt service. Below 1.20, most lenders stop reading. At 1.30 at 80% occupancy — not your current occupancy, and not the rent you plan to charge after renovations — you have a deal a lender will compete for.
Run your own numbers in the deal analyzer before a lender does it for you.
What they look at, in order
- The appraisal's rent schedule — not your rent roll.
- Actual taxes and insurance — quoted, not estimated.
- The coverage ratio at their stress rate, not your note rate.
- Reserves — months of debt service you hold after closing.
- Your credit — as a gate, not a rate.
- The entity — clean LLC, clean operating agreement.
Nothing on that list is your salary. That is the point, and it is also the warning: the property has to stand alone, because the lender is making sure it can.