Is it hard to qualify for a DSCR loan?

Not if the property cash flows. The hard parts of a conventional application, income documents and debt-to-income, are gone. What remains is the ratio, a credit score of 620 to 680 or higher, a 20 to 25% down payment, and three to six months of reserves. The property does most of the qualifying.

The ratio is where files fail. Lenders want rent divided by the full payment at 1.0 or higher, with best pricing at 1.25. In markets where a $500,000 house rents for $2,800, the ratio at 75% loan-to-value is well under 1.0 and the property will not qualify without a much larger down payment.

Recent mortgage lates, a bankruptcy inside two to four years or a foreclosure inside three to seven usually disqualify. First-time investors are accepted at many lenders. If the rent covers the payment and your credit is clean, approval is straightforward.