🏢 DSCR Loan Property Types Explained: Rental Homes, Multifamily & More 🏘️

🛍️ What Type of Property Qualifies for a DSCR Loan? | Investor’s Guide

September 25, 2025•2 min read

🛍️ What Type of Property Qualifies for a DSCR Loan? | Investor’s Guide

🏢 DSCR Loan Property Types Explained: Rental Homes, Multifamily & More 🏘️

🛍️ What Type of Property Qualifies for a DSCR Loan?

If you’re an investor exploring DSCR (Debt Service Coverage Ratio) loans, the biggest question is simple: What kind of property actually qualifies?

DSCR loans are designed for real estate investors who want to qualify based on the property’s cash flow rather than personal income. Unlike traditional mortgages, DSCR lenders focus on whether the rental income covers the property’s mortgage, taxes, and insurance.

Here’s a breakdown of the property types that qualify:

✅ 1. Single-Family Rentals

· Ideal for investors starting small

· DSCR lenders approve based on expected rental income compared to monthly payment

· Can be short-term rentals (Airbnb/VRBO) or long-term tenants

✅ 2. Multifamily Properties (2–4 Units)

· Duplexes, triplexes, and fourplexes are eligible

· Rental income from multiple units strengthens DSCR ratios

· Great for investors building passive income streams

✅ 3. Small Apartment Buildings (5+ Units)

· Many DSCR lenders finance small apartment complexes

· Cash flow from multiple tenants makes qualifying easier

· Higher loan amounts available compared to single-family

✅ 4. Vacation Rentals & Short-Term Rentals

· Properties listed on Airbnb, VRBO, and similar platforms qualify

· Lenders typically use market rent data or actual booking history

· Popular in high-demand travel destinations

✅ 5. Commercial-Use Residential Properties

· Mixed-use properties (storefront + apartments)

· Properties rented for business use (e.g., live/work spaces)

· DSCR approval depends on rental agreements and zoning

What Properties Do Not Qualify?

· Owner-occupied primary residences

· Second homes for personal use

· Raw land with no rental income

🔑 Key Takeaway

If your property generates rent, there’s a good chance it qualifies for a DSCR loan. These loans are ideal for:

· Real estate investors scaling portfolios

· Self-employed buyers who can’t qualify traditionally

· Cash-flow focused strategies like BRRRR

Ready to see if your property qualifies for a DSCR loan? Let’s connect and walk through the numbers together.

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Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: • Fixed-rate mortgages: Offering stability with predictable monthly payments. • Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. • FHA loans: Making homeownership accessible with lower down payments. • VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: • Purchase loans: Financing the acquisition of new buildings or land. • Construction loans: Facilitating the development of your project. • Refinance loans: Restructuring your existing mortgage for better terms. • SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: • Expertise: Our brokers have a deep understanding of both residential and commercial lending. • Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. • Streamlined Process: We handle the paperwork, keeping you informed every step of the way. • Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

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