The pitch for a DSCR loan is a list of things it does not need. No tax returns. No W-2s. No debt-to-income ratio. No employment verification.
All of that is accurate. It is also not the whole file, and the requirements that do exist get mentioned in week three rather than week one.
Here they all are, from CMG Financial's Non-QM Sharp Series guidelines (NMLS #1820, revised 09/21/2026).
Credit
Minimum FICO: 660. That is the floor for the program.
It is not the floor for the terms you want. Leverage moves with score across every column of the grid. At a 740 with coverage of 1.00x or better you reach 80% at or below $1,000,000. At 660, that same purchase tops out at 70%.
So ten points of score can be ten percent of the purchase price in down payment. On a $700,000 property, that is $70,000 for a credit difference that is frequently fixable in a few weeks.
Payment history: 0x30x12. No thirty day lates in the last twelve months. One late mortgage payment inside twelve months and the program is closed until it ages out.
Housing event seasoning: three or more years. Foreclosure, short sale, deed in lieu, bankruptcy. Three years behind you.
The housing history check people do not expect
This is the sentence worth reading twice:
Housing history verification is required on the subject property and the borrower's primary residence, regardless of whether or not the borrower is on the note or vested on title. Any additional housing history included in the loan file that reflects delinquencies will be subject to review and must adhere to the loan program matrix.
Your own home is checked. Even if you are not on the mortgage. Even if you are not on title.
Investors are frequently surprised by this because the loan is a business purpose loan on a different property. The logic is that how you treat the roof over your own head is the best available signal when no personal income is being used.
If your primary residence has a late payment in the last twelve months, that is the file, whether the investment property is immaculate or not.
Reserves, by loan size
- $100,000 to $500,000: three months
- $500,001 to $1,000,000: six months
- $1,000,001 to $2,000,000: six months
- $2,000,001 to $3,000,000: nine months
Reserves are months of the full housing payment on the subject.
Two rules soften this considerably:
Additional financed properties: reserves none. Your other rentals add nothing. On most investment lending each financed property adds months, which is what stalls portfolios. Here it does not.
Cash-out used as reserves: allowable. On a refinance, the proceeds can satisfy the requirement.
Note the jump at $500,000. Moving from a $500,000 loan to a $501,000 loan doubles the reserve requirement from three months to six. If you are structuring near that line, it is worth knowing which side you are on.
Rent loss insurance
Rent loss insurance for the subject property is required and must equal at least six months of local average monthly rents. Blanket policies covering the subject property are permitted.
Two consequences.
It is a real cost and it goes in the denominator. Insurance is the I in PITIA, so a quote without rent loss coverage understates your payment and overstates your coverage ratio. Get the quote with it included before you calculate anything.
It has to be arranged. Not every carrier writes it as a default on an investment policy. Ask your agent for it by name, at six months of local average monthly rents, early enough that a carrier change is possible if needed.
Personal recourse
Personal recourse required. All borrowers should execute the Personal Guaranty Agreement if applicable, or similar forms subject to approval by the investor.
Closing in an LLC does not make this non-recourse. You are personally liable regardless of how title is held.
Documents that must be in the file
1-4 Family Rider and Assignment of Rents, Fannie Mae Form 3170, must be in the origination file.
On a refinance, the Business Purpose and Occupancy Affidavit, and all borrowers execute an Occupancy Certification or similar form.
Experience
Professional investors only: at least twelve months of experience owning or managing income-producing real estate within the most recent thirty-six months from origination of the note. A letter of explanation detailing your experience is required, and the investor may request documentation validating it.
First-time investors are allowed with coverage above 1.0x, a score above 700, no exceptions on the file, a $2,000,000 maximum loan size, and they may not be first-time homebuyers.
Property and market adjustments
- 2-4 units: maximum 75% loan-to-value and combined loan-to-value
- Warrantable condominiums: maximum 75% loan-to-value and combined loan-to-value
- Non-warrantable condominiums: maximum 75% loan-to-value
- Declining markets: 5% loan-to-value reduction
- Non-permanent resident aliens: maximum 75% loan-to-value and combined loan-to-value, no cash-out, $2,000,000 maximum loan amount
- Short-term rental: $2,000,000 maximum loan amount, 70% combined loan-to-value, 1.00x minimum coverage
Builder-related transactions are excluded where the transaction is a builder refinance and the builder or an affiliated entity has built more than four units in the same subdivision, development or condominium project as the subject, or where the loan is secured by a newly constructed second home or investment property and the borrower has a relationship or business affiliation with the builder, developer or seller.
Loan parameters
- Product types: 15 year fixed, 30 year fixed, 40 year fixed with interest only
- Loan amount: $100,000 minimum, $3,000,000 maximum
- Occupancy: investment property
- Interest only: eligible as 10/20 and 10/30, fixed, minimum 700 FICO, maximum 75% loan-to-value at 1.00x coverage or 70% at 0.75x, not permissible on No Ratio
- Prepayment penalties apply by state
The ten minute qualification check
- What are my three credit scores, and which grid row does the lowest qualifying one put me in?
- Any thirty day late on any mortgage in the last twelve months, including my own home?
- Any foreclosure, short sale, deed in lieu or bankruptcy inside three years?
- What are the reserves for my loan size, and am I near the $500,000 line?
- Have I priced insurance including six months of rent loss coverage?
- Do I have twelve months of ownership or management experience inside the last thirty-six?
- Is the property a 2-4 unit or a condominium, capping me at 75%?
Seven questions. All answerable before you write an offer.
Common questions
What credit score do I need for a DSCR loan? 660 is the program minimum. Leverage improves materially with score: a 740 borrower reaches 80% at or below $1,000,000 with coverage of 1.00x or better, while a 660 borrower tops out at 70% on the same purchase.
Do they check my personal mortgage? Yes. Housing history verification is required on the subject property and your primary residence, regardless of whether you are on the note or vested on title.
How many months of reserves does a DSCR loan require? Three months from $100,000 to $500,000, six months from $500,001 to $2,000,000, and nine months from $2,000,001 to $3,000,000. Additional financed properties require no reserves.
What is rent loss insurance and do I need it? It covers lost rental income and it is required on the subject property, equal to at least six months of local average monthly rents. Blanket policies covering the subject are permitted.
Is a DSCR loan non-recourse? No. Personal recourse is required and borrowers execute a Personal Guaranty Agreement, whether or not title is held in an LLC.
How long after a foreclosure or bankruptcy can I get a DSCR loan? Three or more years of housing event seasoning, with a clean 0x30x12 payment history.
Related reading
- DSCR and investor property loans, the full index for this topic
- DSCR Loan FAQ: The Questions Investors Ask Before Their First One
- How to Calculate DSCR Yourself Before You Write the Offer
- Closing a DSCR Loan in an LLC: The Vesting Rules and What They Cost You
Why bring this file to us
- We check the requirements at the start. Every item here is knowable on day one and several of them are not fixable in week four.
- We quote insurance including rent loss coverage, because it is required and it changes your coverage ratio.
- We look at your own home's payment history, which is checked here whether or not you expected it.
- Broker model. Multiple investors rather than one bank's shelf, which is what a file like this needs when the first answer is no.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending and a Certified Mortgage Planner, NMLS #173141, originating mortgages since 1999. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
Send me your score, the loan size and twelve months of mortgage history and I will tell you today whether the file clears the requirements below.
Program figures in this post come from the CMG Financial (NMLS #1820) guideline set named above, as published on the revision date given. CMG Financial is the parent company of EPiQ Lending. These figures describe one investor's program at one point in time. Other investors price and underwrite the same borrower differently, guidelines change without notice, and nothing here is an offer of any specific program or terms. Confirm current eligibility on your own file before you plan around any of it.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Rates, terms, and program guidelines change and depend on credit approval, property appraisal, income and asset verification, and other qualifying factors. Not all applicants will qualify. Non-QM, asset-based and business purpose financing carry different pricing, terms and consumer protections than agency financing. Consult your tax advisor regarding the tax treatment of any income or distribution strategy.
Run the coverage ratio before you write the offer
DSCR files are decided by the rent against the payment. Send the address and the rent and I will tell you where the ratio lands before you are committed.
