No W-2. No personal income verification. DSCR loans for dscr rate & term refinance properties qualify on market rent — what a licensed appraiser says the property is worth as a rental. Here's exactly how the process works.
Qualifying for a DSCR loan on a dscr rate & term refinance property is fundamentally different from a conventional mortgage. There is no debt-to-income ratio. There is no 2-year employment history requirement. The loan qualifies on the property — specifically, on what the market says a comparable rental should earn — not on you. The five steps below walk you through what this means in practice.
DSCR rate & term refinance programs cover residential rental properties — 1 to 6 units — that are currently generating rental income or hold appraised market rent value per Form 1007. The property must be investment-purpose (non-owner-occupied). Whether you're refinancing out of a hard money loan, a balloon note, or an existing DSCR product, the property type classification is what establishes program eligibility.
The key confirmation: is this a 1–6 unit residential property? If yes, you're in DSCR territory — not commercial. Residential DSCR is a fundamentally different product category with residential LTV, residential loan limits (up to $3.5M), and residential underwriting standards.
DSCR stands for Debt Service Coverage Ratio. The formula: Market Rent (Form 1007) ÷ Monthly Debt Service = DSCR.
Form 1007 — the Single-Family Comparable Rent Schedule — is an appraiser-completed addendum that estimates what the property would rent for in the open market based on comparable rentals. This is not your actual collected rent. It's the appraiser's market opinion, which provides the stable, verified figure that DSCR underwriting requires.
When DSCR ≥ 1.0, the property's market rent covers its debt service — the most favorable qualification scenario. But DSCR programs don't require 1.0 as a floor. Sub-1.0 programs and no-ratio programs exist specifically for properties where the standard calculation doesn't produce a clean pass.
FICO score is the primary lever that determines how much you need to put down and how much the lender will advance. Here's how the tiers map:
No-ratio programs are available at 640+ FICO for properties where DSCR calculation is not the right qualifying methodology. If your property has a thin or sub-1.0 DSCR, this is your primary alternative pathway.
The DSCR documentation list is notably shorter than a conventional loan. Here's what you'll need:
What you do NOT need: Tax returns. W-2s. Pay stubs. Personal income documentation of any kind. Employment verification. This is what makes DSCR uniquely accessible for dscr rate & term refinance investors with complex personal income structures or LLC ownership.
If your property's Form 1007 market rent doesn't produce a DSCR ratio sufficient for standard programs, asset depletion can be layered in to strengthen the refinance application. Many experienced DSCR originators have structured rate & term refinances using asset depletion for investors with significant liquid assets but properties with thinner rental-to-payment ratios.
Quick Answers
DSCR = market rent (Form 1007) ÷ monthly debt service. The appraisal determines the property's market rent — no W-2, no tax returns, no personal income documentation. If market rent supports the new payment, you qualify. No-ratio programs available when rent doesn't fully cover the mortgage.
Minimum 600 FICO. Up to 85% LTV at 720+ FICO. No cash-out. No personal income documentation. LLC ownership allowed. No-ratio programs available. 47 states. Typical close timeline 30-45 days. Max loan $3.5M.
Any investor with a rental property where the market rent supports the new mortgage payment. Self-employed investors, investors with multiple properties, W-2 employees, and LLC owners all qualify. No limit on number of properties financed. DSCR evaluates the property, not the borrower's personal income.