Are DSCR loans non-recourse?

Mostly no. A DSCR loan is underwritten like a non-recourse commercial loan, since the lender qualifies the property rather than your income, but almost every residential DSCR lender still asks for a personal guarantee. That guarantee makes the loan recourse. Truly non-recourse DSCR financing exists, usually on larger or commercial deals, and it comes with a lower LTV and a higher ratio minimum.

The lender leans on the property, the rent schedule and the ratio instead. On the $500,000 default rental, $4,000 of rent against a $3,200 payment gives a DSCR of 1.25.

Put 25% down and you borrow $375,000. After a default the lender forecloses and the sale pays down that balance. With a personal guarantee, any shortfall follows you; with true non-recourse debt, the lender absorbs it. Carve-outs still restore liability for fraud or pocketing rents. How a DSCR loan works fills in the rest.