Quick answer
- Who it may fit
- Investors qualifying a rental using its property cash flow.
- Down payment or equity
- Purchase cash or refinance equity and reserves vary by lender; budget for closing costs.
- Insurance & fees
- Rates and fees can be higher; ask about prepayment penalties and any insurance requirement.
- Key eligibility
- Rent analysis, coverage ratio, property, credit and reserves must meet lender rules.
- Main tradeoff
- Less reliance on personal income can mean more cash down and higher costs.
Down payment is not total cash to close. Educational guidance pending licensed review.
The secure application opens outside lndwell.com. This page is not an application or pre-approval.
Debt service coverage ratio loans measure the property's rental income against the payment on the loan. Personal income is often not part of the calculation, which makes these useful for investors expanding a portfolio beyond what personal debt-to-income would allow.
- Investors buying or refinancing rental property
- Owners of multiple financed properties
- Buyers of small multifamily or short-term rental property, where the program permits it
- Qualifying centers on the property's cash flow
- Vesting in an entity is commonly permitted
- Portfolio growth is not constrained by personal debt-to-income in the same way
- Rates and fees are typically higher than owner-occupied financing
- Larger down payments and reserves are generally expected
- Prepayment penalties are common on this product class
- Coverage-ratio requirements and short-term-rental treatment vary by lender
These are the factors an underwriter typically reviews. They are not a checklist of requirements, and meeting them does not guarantee eligibility or approval.
- A rental cash-flow calculation meeting the lender's coverage requirement
- Credit review, and reserves appropriate to the program
- An eligible non-owner-occupied property with a supporting rent analysis
- Entity documentation where the loan is vested in an LLC
All loans are subject to credit, income, property and underwriting approval. Nothing on this page is a loan offer, an approval, a rate lock or a commitment to lend. Programs, rates and terms are subject to change without notice.