DSCR Loans in Indiana – Investment Property Financing Without Tax Returns
For real estate investors, qualifying for traditional mortgages can be challenging, especially if your income is variable or if you reinvest earnings. That’s where DSCR loans come in. Designed specifically for rental property investors, DSCR (Debt Service Coverage Ratio) loans allow you to qualify based on the property’s cash flow, not your personal income.
At American Hero Home Loans, I work with investors across Indiana to help them finance or refinance rental properties quickly and easily, whether they own one or multiple investment homes.
What Is a DSCR Loan?
A DSCR loan is a non-qualified mortgage (non-QM) tailored for real estate investors. Instead of using your W-2s or tax returns, lenders assess the property’s rental income and how well it covers the debt obligation. DSCR loans are ideal for:
- Real estate investors with multiple properties
- Self-employed borrowers
- Buy-and-hold rental property owners
- Clients using complex tax strategies
You can use DSCR loans for single-family rentals, duplexes, triplexes, fourplexes, or entire portfolios.
How DSCR Is Calculated
DSCR = Gross Monthly Rent ÷ Monthly Mortgage Payment (PITI)
- DSCR of 1.0 means break-even (rent = mortgage)
- DSCR above 1.0 means positive cash flow
- Some lenders allow DSCR as low as 0.75, but the best terms start at 1.25+
This metric focuses on the property’s ability to cover expenses, making personal income documentation unnecessary.
Benefits of DSCR Loans
- No income verification: No W-2s, tax returns, or employment history required
- Use rental income only: Approval is based on actual or projected rent
- Fast closings: Less paperwork means quicker approvals
- Purchase or refinance options are available
- Build your portfolio: Great for investors scaling operations
- Flexible ownership: Finance in your name or LLC (varies by lender)
Who Qualifies for a DSCR Loan?
- Credit score of 620+ (680+ preferred for best rates)
- Purchasing or refinancing a non-owner-occupied rental
- Lease agreement or appraiser rent estimate available
- DSCR generally must be 1.0 or higher
Note: DSCR loans are for investment properties only—you cannot live in the home you’re financing.
Fixed vs. Adjustable DSCR Loans
Fixed-Rate DSCR Loans
- Stable monthly payments over the life of the loan
- Ideal for long-term rental properties
Adjustable-Rate DSCR Loans
- Lower introductory interest rate
- Best for short-term holds or properties you plan to sell or refinance
Why Work With a DSCR Loan Specialist?
DSCR loans require a lender who understands investment property financing. With over 19 years of mortgage experience, I help investors in Lake, Porter, LaPorte, Jasper, and Newton counties, and beyond, evaluate their options and close quickly.
- Expert DSCR strategy support
- Cash flow analysis and rent guidance
- Access to multiple DSCR loan programs
- Fast responses and investor-friendly service
DSCR Loan FAQs
Can I qualify for a DSCR loan without a job?
Yes. As long as the rental income supports the mortgage, you can qualify without showing employment or income documents.
Can I buy property in an LLC?
Many DSCR lenders allow financing in an LLC or business name, depending on the loan structure and risk profile.
Is there a limit on how many properties I can finance?
Most DSCR lenders do not impose a hard limit, but portfolio size and total exposure may affect terms.
Can I use a DSCR loan for Airbnb or short-term rentals?
Some lenders allow it, especially if short-term rental income history or appraiser projections can support the debt.
Final Thoughts
DSCR loans are ideal tools for real estate investors looking to expand without traditional income documentation. Whether purchasing a new rental or refinancing existing properties, this flexible loan structure keeps the focus on what matters most: property cash flow.
Contact American Hero Home Loans today to explore DSCR loan options and learn how we can help you move forward confidently.
