The Loan That Changed Portfolio Building
For years, real estate investors hit a wall at 4–10 conventional loans. After that, Fannie Mae and Freddie Mac guidelines make it nearly impossible to qualify for additional financing — regardless of how profitable your portfolio is.
DSCR (Debt Service Coverage Ratio) loans eliminate that wall entirely.
What Is a DSCR Loan?
A DSCR loan qualifies you based on the income generated by the investment property itself, not your personal W-2 income or tax returns. The lender calculates your DSCR ratio:
DSCR = Monthly Rental Income ÷ Monthly PITI Payment
A DSCR of 1.0 means the property breaks even. Most lenders, including Kiavi, require a minimum DSCR of 1.20 — meaning the property generates 20% more income than the debt payment.
A Real DSCR Example
Property: Single-family rental, Montgomery, AL Monthly Rent: $1,350 Monthly PITI: $1,050 DSCR: $1,350 / $1,050 = 1.29 ✓ (above the 1.20 minimum)
Kiavi would approve this loan based entirely on the property's income. Your personal income, tax returns, and number of existing properties are irrelevant.
DSCR Loan Terms in 2026
| Feature | Details |
|---|---|
| Down Payment | 20–25% |
| Rates | From 7.5–9.5% (30-year fixed) |
| Loan Limits | Up to $3M+ |
| Properties | No limit on number of properties |
| Documentation | Lease agreement + property appraisal |
| Close Time | 10–21 days with Kiavi |
Using DSCR Loans in the BRRRR Strategy
DSCR loans are the perfect refinance vehicle for BRRRR deals. After you've rehabbed and stabilized a property with a quality tenant, you refinance using a DSCR loan to pull your capital back out — then repeat the cycle.
Use DealCheck's BRRRR calculator to model your DSCR refinance scenarios before you buy. Enter the projected rent, estimated ARV, and Kiavi's current rates to see exactly how much capital you'll pull back out and what your cash-on-cash return will be after the refinance.
Managing Your Growing Portfolio
As your DSCR-financed portfolio grows, property management becomes your biggest operational challenge. Buildium is built for exactly this scenario — it scales from 1 unit to 500+ with online rent collection, maintenance tracking, and full accounting. Setting it up before you need it is the difference between a portfolio that runs itself and one that consumes your weekends.
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