Investor lending
DSCR and investment property loans in Kentucky. Rental property financing based on the property's income.
DSCR loans are another way to finance a rental purchase or refinance. I compare the property's rental income, the loan terms and your investment plans to find the right lender.
Start with a conversation. No credit check for an initial discussion.
How DSCR financing works
A DSCR loan uses the property's rental income to judge whether it can support the mortgage payment. It works for a single rental or a growing portfolio when you want financing that doesn't rely on traditional personal income documentation.
DSCR stands for debt service coverage ratio. Divide the qualifying monthly rent by the full mortgage payment, including taxes, insurance and any association dues. That ratio is a big part of the review, along with your credit, your available funds and the property itself.
Program norms across the lenders I place these with. Individual programs differ on minimum ratio, down payment and reserves.
Reading the ratio
- 1.20 and above: strong. Prices well across most programs and gives you room on the down payment.
- 1.00 to 1.20: workable. Clears the usual bar, and pricing tightens as you move up the range.
- Below 1.00: the rent doesn't fully carry the payment. Some programs will still finance it with more money down, but it's a conversation rather than a form.
Illustrative bands. Each lender sets its own thresholds, and some programs will finance below 1.00 with a larger down payment.
For a Louisville-area rental, I look at the purchase price, supported rent, taxes, insurance and association dues together. What matters is the property's actual numbers and the financing available for it.
Comparing DSCR and conventional investment loans
Conventional investment financing and DSCR loans qualify you in different ways. I compare the available terms, documentation, cash requirements and your plans for the property before I recommend a direction.
If you're planning more purchases, the financing strategy matters beyond this one closing. We can talk through how much cash you want to keep available and how this loan fits the next stage of your portfolio.
What the lender asks for
The lender reviews the property's rent, the proposed payment, the value and the borrower documentation its program requires. I'll tell you which documents and reserves the program we pick calls for before you start gathering anything.
- 01Rent is documentedA signed lease, or the appraiser's market-rent schedule if the property is vacant.
- 02The full payment is builtPrincipal, interest, taxes, insurance and any association dues on the proposed loan.
- 03Ratio and down payment set the priceA higher ratio or more money down moves you into a better tier.
- 04Reserves and entity papersA few months of payments in the bank, plus LLC documents if title is vesting in one.
- 05Close and plan the next oneReview how this loan fits your next purchase.
Typical sequence. Document lists vary by lender, and I'll tell you what a specific program wants before you apply, not after the conditions show up.
Where the down payment usually comes from
Most repeat purchases here are funded with equity that's already sitting in something else. A HELOC or second mortgage in Kentucky against a property you already own leaves the first mortgage alone, which matters if that loan carries a rate you wouldn't want to give up. A cash-out refinance in Louisville is the alternative when the existing rate isn't worth protecting anymore.
Which one is right depends on the rate on the loan you already have. That's a five-minute conversation, not a guess.
Run the numbers
Does the rent cover the payment?
Enter the rent and the full monthly payment including taxes, insurance and dues. Most programs want 1.00 or better, and 1.20 prices well.
Defaults reflect typical Louisville-area rents and payments. These are illustrative estimates, not a rate quote, an offer, or a commitment to lend. Your real figures depend on your full file. Every other program has its own calculator, and they are collected here.
Debt service coverage ratio
…
monthly rent ÷ full monthly payment (PITIA)
Check these against your fileCommon questions
What is a DSCR loan?
Debt service coverage ratio. Instead of qualifying you on your personal income and tax returns, the lender qualifies the property on whether the rent covers the payment. Divide the monthly rent by the full monthly payment (principal, interest, taxes, insurance and any association dues) and that number is the ratio. Most programs want to see 1.00 or better, and pricing improves as it climbs.
Do I need to show tax returns for a DSCR loan?
DSCR programs generally use the rental property's income rather than your personal tax returns to qualify. I'll confirm exactly what documentation the lender we select requires.
How much down payment does a DSCR loan need in Kentucky?
Usually 20 to 25 percent, sometimes more depending on the ratio, the property type and your credit. A stronger coverage ratio can bring the down payment requirement down, and it improves the rate.
Can I use a DSCR loan to buy multiple rentals?
Yes. DSCR financing can be used for multiple rental purchases or refinances. We look at each property's numbers and the lender's requirements as part of your overall financing plan.
Does short-term rental income count?
It can, but programs handle it differently. Some will use documented short-term rental history for the property. Others require a long-term market rent figure no matter how you plan to run it. Which lender I use makes a real difference to the numbers here, so bring it up before you write an offer on a property whose economics depend on nightly rates.
No credit pull · No obligation
Discuss your DSCR loan or investment property financing.
Tell me what you're buying or refinancing, your timing, and the questions you want to work through. I'll review the details and contact you about the next step.
🔒 Nothing on this form touches your credit. No Social Security number, no pay stubs, no application. Just enough for me to follow up with you. Equal Housing Opportunity. Ryan Miles, NMLS #112627 · Coast2Coast Mortgage, LLC, NMLS #376205.