Can First-Time Investors Qualify for a DSCR Loan? #

One of the advantages of DSCR loans is that they do not rely on a borrower’s personal income to determine eligibility. That structure makes them accessible to a wide range of investors, including those who are just getting started.

First-time investors can qualify for DSCR loans if the property meets lender requirements for income and coverage.

Why Experience Isn’t Required #

Unlike conventional loans that may weigh heavily on a borrower’s track record, DSCR loans focus on the property’s rental income. As long as the property generates enough cash flow to cover its housing expenses, a first-time investor has a real chance at approval.

What Lender Typically Like to See #

While first-time investors are welcome, many lenders prefer to see that the borrower already owns a primary residence. This shows a history of managing housing payments and can make an approval smoother.

That said, not owning a home does not necessarily disqualify a new investor; it simply means the lender may look more closely at other strengths, such as credit, reserves, and the property itself.

Key Requirements for First-Time Investors #

• A property that produces enough rental income to meet the DSCR threshold, often 1.0 to 1.25.

• A down payment of 20 to 25 percent of the purchase price.

• A credit score of 660 or higher, with better terms available at higher scores.

• Proper documentation of leases, rent rolls, or market rent estimates through appraisals.

• Adequate reserves to cover payments in the event of vacancies or unexpected costs

Summary #

Yes, first-time investors can qualify for a DSCR loan. Lenders may prefer borrowers who already own a primary residence, but the ultimate decision is based on the property’s cash flow and the borrower’s overall financial profile. This makes DSCR lending a practical entry point for investors who want to start building rental portfolios.