Investors search for a "DSCR mortgage" when they want long-term financing on a rental held in an LLC without proving personal income. The DSCR loan is exactly that, and it is always business-purpose: the borrower is the LLC that owns the rental, and the property is held for investment, never lived in by the owner.
DSCR stands for debt service coverage ratio: the property's rental income divided by its debt payments. If the rent covers the payments, the loan works, whatever your W-2 or tax return says. The DSCR qualification explainer goes through the calculation.
The published terms
| Term | What applies |
|---|---|
| Borrower | Your LLC, US-owned or foreign-owned |
| Property | Non-owner-occupied rental: single family, 2-4 unit, condo, townhome, small multifamily up to 9 units |
| Loan size | Core $1M to $3M, $3M to $5M by exception |
| Maximum leverage | Up to 80% LTV on purchase; cash-out lends less |
| Rate and term | 30-year fixed from 6% to 6.5%; interest-only options |
| Minimum DSCR | As low as 1.0x |
| Personal income documents | Not required |
| Fee | 1% to 2% of the loan, paid at closing |
How the ratio sizes the loan
The lender takes the rent the property earns, or the market rent the appraiser supports for a vacant unit, and compares it with the monthly payment of principal, interest, taxes, insurance and any association dues. At 1.0x the rent exactly covers those payments. A higher ratio gives more room on leverage and pricing; a ratio below the minimum means a smaller loan or more equity.
Because the test is the property's own cash flow, the same DSCR mortgage for an LLC rental works for an owner with no US income at all, which is why foreign investors use it as their long-term hold.
Why the LLC matters
- It is the borrower, which keeps the loan business-purpose and outside consumer rules
- It needs an EIN and a US bank account in its name before closing
- A foreign owner gets the EIN with IRS Form SS-4, without a Social Security number
- A single-member LLC owned by a non-US person files Form 5472 every year; see Form 5472 for a foreign-owned LLC
A worked example
An LLC buys a $2,000,000 rental with a DSCR loan at 80% LTV: the loan is $1,600,000 and the equity $400,000, before closing costs and the 1% to 2% fee. The lender then checks that the rent covers the full monthly payment at the minimum ratio or better. If it does not, the answer is a smaller loan or more equity, not a request for your tax returns.
The same arithmetic applies to a cash-out refinance on a rental you already own, with less leverage than on a purchase. The DSCR calculator runs the ratio on your own numbers before you send the deal.
Where DSCR fits in a plan
Many investors do not start with a DSCR loan. They buy or build with a short-term bridge, renovation or construction loan, lease the property up, then refinance into a DSCR loan to hold it. The bridge-to-DSCR refinance explains the sequence, and the DSCR program page lists the property types accepted, including short-term rentals and portfolios.
A foreign national follows the same path on the same terms; the only additional work is the US LLC, its EIN and a documented source of funds, which the foreign national DSCR guide covers.