Looking for Investor Feedback on DSCR Loan Structures & Current Market Terms

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Looking for Investor Feedback on DSCR Loan Structures & Current Market Terms

Ephraim Shapiro
Member since 2026 · 4 posts · 3 votes

I'm looking to compare notes with other investors and lenders here who have been actively using DSCR loan products over the past 6–12 months.

A few things I’d love to hear your experience on:

  • How have your DSCR deals been underwriting recently?
  • Have you seen any major shifts in rates, prepayment structures, or reserve requirements?
  • What rates do you typically see with these loans?
  • Are you finding certain property types (SFR, 2–4 units, small multis, condos) getting easier or harder to finance through DSCR programs?
  • For those scaling portfolios, how are DSCR loans fitting into your broader financing strategy?

From what I've seen in conversations with other investors, DSCR has been useful for:

  • situations where tax‑return income doesn’t reflect actual cash flow
  • investors holding multiple properties
  • cases where rental income is the primary qualification metric

Curious to hear what others are experiencing — what’s working well for you, what challenges you've run into, and any tips for structuring deals efficiently in today’s environment.

Looking forward to learning from everyone’s insight.

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  • Andrew Lee
    Lender · Grasonville, MD · Member since 2025 · 70 posts · 16 votes
    8mo

    As a lender, I am seeing approvals around 6-8% currently. Experience matters with hard money loans so you would want to start in the 2-4 segment then you work your way up to 5+. The more experience you have, the more favorable terms you get when scaling. Reserve requirements (broad range) are 6-12 months of payments. You do not want to put yourself in a situation where you do not have cash flow from your DSCR property. One big HVAC issue could be costly.

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  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    8mo
    • How have your DSCR deals been underwriting recently?  Aggressively.  Lot of secondary market capital chasing these notes. 
    • Have you seen any major shifts in rates, prepayment structures, or reserve requirements?
    • What rates do you typically see with these loans? Rates have been fairly stick by you'll find a range of 5.875% - the low 8s depending on FICO, LTV, amount, transaction type, etc but the average today is somewhere in the 6s. 
    • Are you finding certain property types (SFR, 2–4 units, small multis, condos) getting easier or harder to finance through DSCR programs? Rates tend to favor SFRs but no major difference in ability to underwrite as long as it debt covers. The small balance DSCR market for 5-8 unit MF is more picky though right now. 
    • For those scaling portfolios, how are DSCR loans fitting into your broader financing strategy? DSCR loans are a natural fit for those looking to scale because there's no limit on the # of financed properties owned and you can cash out refi BRRRRs with little or no seasoning giving you the ability to do way more deals per year. 
    [email protected]818-606-8823
    Investor Property Loan5306 Reviews
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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    8mo
    Quote from @Ephraim Shapiro:

    I'm looking to compare notes with other investors and lenders here who have been actively using DSCR loan products over the past 6–12 months.

    A few things I’d love to hear your experience on:

    • How have your DSCR deals been underwriting recently?
    • Have you seen any major shifts in rates, prepayment structures, or reserve requirements?
    • What rates do you typically see with these loans?
    • Are you finding certain property types (SFR, 2–4 units, small multis, condos) getting easier or harder to finance through DSCR programs?
    • For those scaling portfolios, how are DSCR loans fitting into your broader financing strategy?

    From what I've seen in conversations with other investors, DSCR has been useful for:

    • situations where tax‑return income doesn’t reflect actual cash flow
    • investors holding multiple properties
    • cases where rental income is the primary qualification metric

    Curious to hear what others are experiencing — what’s working well for you, what challenges you've run into, and any tips for structuring deals efficiently in today’s environment.

    Looking forward to learning from everyone’s insight.



    • How have your DSCR deals been underwriting recently? This one is a broad question, but generally guidelines have been on the lenient side. Appraisals and value in general seems to be a major issue as of lately with most lenders. 
    • Have you seen any major shifts in rates, prepayment structures, or reserve requirements?
    • Yes. Many states are not allowing Prepays or are forcing lenders to reduce the years, affecting interest rates/fees. Generally reserves are not very important unless it is a rate and term refinance or a purchase. Lenders generally want to see 3-6 months. 
    • What rates do you typically see with these loans?
    • 5.8-9% depending on the terms, asset, credit, and scenario. 
    • Are you finding certain property types (SFR, 2–4 units, small multis, condos) getting easier or harder to finance through DSCR programs?
    • Condos, Manufactured Homes, and 5+ MFH are tricky now. Having a clear picture of the deal upfront helps tremendously. SFRs are easy to get across, except if it is a mini home or located in a rural area. 
    • For those scaling portfolios, how are DSCR loans fitting into your broader financing strategy?
    • They are best used if conventional financing is tapped out or not available. It should be a second option in most cases. 
    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
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  • Ephraim Shapiro
    OP
    Member since 2026 · 4 posts · 3 votes
    8mo

    Thank you all for you insightful replies. Question: Does SFR need to be renter occupied or owner occupied is also ok? if yes, how is an owner occupied SFR underwritten for this kind of a loan?

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    • Simcha B Shedrowitzky
      Lender · Nationwide · Member since 2024 · 76 posts · 23 votes
      8mo
      Quote from @Ephraim Shapiro:

      Thank you all for you insightful replies. Question: Does SFR need to be renter occupied or owner occupied is also ok? if yes, how is an owner occupied SFR underwritten for this kind of a loan?

      Hi Ephraim,

      Welcome to Bigger Pockets!

      DSCR loans are only for renter-occupied investment properties.

      A DSCR loan will not be underwritten for owner-occupied properties, as the underwriting is based entirely on the property's rental income.

      Best regards.

      0Reply
    • Erik EstradaBusiness Member
      Lender · Member since 2022 · 6k+ posts · 1k+ votes
      8mo
      Quote from @Ephraim Shapiro:

      Thank you all for you insightful replies. Question: Does SFR need to be renter occupied or owner occupied is also ok? if yes, how is an owner occupied SFR underwritten for this kind of a loan?


      DSCR loans are for non-owner occupied properties only. It must be either tenant occupied or vacant.

      [email protected]818-269-7983
      LuxePrivate Investments LLC 572 Reviews
      WebsiteView Page
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  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 496 votes
    8mo

    Regarding your questions, as a mortgage broker working with clients what I have seen:

    • How have your DSCR deals been underwriting recently?
    • Deals are getting done as long as the property can pass the appraisal and the borrower meets credit and down payment or equity requirements. I've seen DSCR loans for credit scores of 620 and up.
    • Have you seen any major shifts in rates, prepayment structures, or reserve requirements?
    • Varies by lender. Rates are about 5.99% (if you want to buy down) and up. In the 6s with no buydown. Prepayment penalties are limited in some states. In many states, have prepayment penalty options for 1,2,3,4 and 5 years. Generally reserves are a minimum of 3 months for a purchase and some programs allow cash out for a cash out refinance to be used as reserves. 
    • What rates do you typically see with these loans?
    • 5.99 and up if you buy down. With no buy down, somewhere in the 6s. Varies by program. Major factors are LTV, credit score and type of property.
    • Are you finding certain property types (SFR, 2–4 units, small multis, condos) getting easier or harder to finance through DSCR programs?
    • 1-4 units generally have better rates compared to 5-8 units. Condos are fine as long as long as the condo questionnaire isn't problematic so that can be a wild card. 
    • For those scaling portfolios, how are DSCR loans fitting into your broader financing strategy?f
    • I see clients using this to scale more quickly as only need the down payment and closing costs as far as cash to close versus a conventional loan where cash is heavily scrutinized along with debt to income (DTI) ratios and all other liabilities. Some clients also use to get cash out of their property for new purchases. Compared to conventional loans, DSCR loans are generally less paperwork and more easy going process. 

    Happy to connect to discuss further. 

    [email protected]818-770-0340
    Bright Skyline518 Reviews
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