Investor Loan FAQ
DSCR, hard money & non-QM questions — answered.
The ten questions real estate investors, self-employed borrowers, and brokers ask us most — answered in plain English. For a quote on your deal, call (929) 713-0587 or request a term sheet below.
1. What is a DSCR loan, and how do I qualify without personal income or tax returns?
A DSCR (Debt Service Coverage Ratio) loan is a non-QM, business-purpose loan that allows real estate investors to qualify based entirely on a rental property's cash flow rather than personal tax returns, W-2s, or DTI (Debt-to-Income) ratios. You qualify by showing that the property's gross monthly rent covers the total monthly housing expense (PITIA: Principal, Interest, Taxes, Insurance, and HOA fees) with a DSCR ratio typically of 1.0 or higher.
2. What is the difference between a Hard Money loan and a DSCR loan?
The primary difference lies in the property condition and investment timeline. Hard money loans are short-term bridge financing (6–24 months) used for distressed properties needing rehab, such as fix-and-flip or BRRRR acquisitions. DSCR loans are long-term permanent financing (15- or 30-year fixed) used for stabilized, rent-ready properties held as passive income rentals.
3. How do Bank Statement loans work for self-employed borrowers?
Bank Statement loans are a popular Non-QM product designed for self-employed business owners who take legal tax write-offs that lower their net taxable income. Instead of tax returns, lenders analyze 12 to 24 months of personal or business bank statements to calculate qualifying average monthly income based on actual cash deposits.
4. Can I use a DSCR loan to finance short-term rentals like Airbnb or VRBO?
Yes, DSCR loans can be used for short-term rentals (STRs). Qualifying rental income is evaluated using historic 12-month booking performance from platforms like Airbnb or VRBO, short-term rental market appraisals, or reliable third-party data aggregators like AirDNA.
5. How fast can a hard money loan close compared to traditional bank financing?
Hard money loans typically close in 7 to 14 days, compared to traditional bank loans which can take 30 to 45 days. Because private lenders underwrite the property asset and After-Repair Value (ARV) rather than personal finances, approvals and funding are expedited for time-sensitive deals.
6. What credit score and down payment are required for a DSCR loan?
Most DSCR loan programs require a minimum credit score starting between 620 and 660, with higher credit scores (740+) securing the best interest rates. Standard down payment requirements range from 20% to 25% (up to 80% LTV) for purchase transactions.
7. What is ARV in hard money lending, and how much will a lender finance?
ARV stands for After-Repair Value — the estimated market value of a property after all planned renovations are complete. Hard money lenders often cover up to 85%–90% of the property purchase price and 100% of the renovation budget, provided the total loan amount does not exceed 70% to 75% of the ARV.
8. Can I close a DSCR or Hard Money loan in an LLC or Corporate Entity?
Yes. Closing investment property loans under a business entity (LLC, S-Corp, Partnership, or Corporation) is standard and encouraged. Titling your asset in an LLC protects personal liability and simplifies operations for multi-property real estate portfolios.
9. What is a Non-QM loan, and who is the ideal candidate?
A Non-QM (Non-Qualified Mortgage) is a loan that doesn't follow standard government-backed mortgage rules set by Fannie Mae or Freddie Mac. Non-QM loans are ideal for real estate investors, self-employed workers, gig workers, foreign nationals, or borrowers with recent credit events (such as bankruptcies or foreclosures) who need alternative income verification.
10. Can I get a DSCR loan if the property cash flow ratio is below 1.0 (No-Ratio DSCR)?
Yes. While a DSCR ratio of 1.0+ is standard, No-Ratio or sub-1.0 DSCR programs allow investors to purchase or refinance properties where rents do not fully cover mortgage payments. These deals typically require higher down payments (25%–30%+) and stronger credit scores, making them useful for acquiring vacant or underperforming properties planned for stabilization.
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