How do the loan structures compare?
| Conventional investor loan | DSCR loan | |
|---|---|---|
| Qualification | Personal income, tax returns, debt-to-income ratio | Property rent compared with full payment |
| Borrower | Usually individuals | Individuals or LLCs (with guarantees) |
| Number of properties | Limits on financed properties apply | Programs commonly serve investors with many rentals |
| Documentation | Full income documentation | Lease or market rent, entity documents, credit and reserves |
| Pricing | Often lower for borrowers who fit the box | Generally higher, reflecting the flexibility |
Which investors may fit each option?
A conventional investment-property loan can be a good fit for a W-2 earner buying a first or second rental, with tax returns that clearly show enough income. It becomes harder as you grow: each new property adds to your debt-to-income ratio, rental income is often counted at a discount, and there are caps on financed properties. Conventional loans are also generally made to individuals rather than LLCs.
DSCR loans are built for the investor whose portfolio is growing, whose tax returns show heavy depreciation and write-offs, or who wants to hold property in an LLC. The trade-off is that DSCR pricing is generally higher than conventional pricing for a borrower who fits the conventional box. We do not publish pricing; it depends on the file.
How does a DSCR loan focus on the property?
Investors who run a business-purpose portfolio usually want each new property to stand on its own rent. That is the DSCR frame. If you are comparing approaches, DSCR vs. bank statement loans covers the self-employed angle, and the DSCR loans page explains how the ratio works. This site arranges business-purpose financing for non-owner-occupied property only.
What questions do investors ask?
Is a DSCR loan or a conventional loan better for a rental?
Conventional loans can fit borrowers with strong, documented income and few properties. DSCR loans fit investors who want to qualify on rent, borrow in an LLC or keep growing a portfolio.
Can I close a conventional investor loan in my LLC?
Conventional loans are generally made to individuals. DSCR programs commonly lend to LLCs with personal guarantees.