DSCR Loans in Virginia: Common Questions from Investors
If you’re investing in Virginia rental properties and searching for a flexible financing option, a DSCR loan might be the right fit. Here’s how these loans work — explained in plain English, with local investors in mind.
What is a DSCR loan?
A DSCR loan (Debt Service Coverage Ratio loan) is an investment property mortgage that qualifies you based on the rental income of the property, not your personal income.
Instead of tax returns or W-2s, lenders focus on one thing:
Does the rent cover the mortgage payment?
That’s why DSCR loans are popular with Virginia real estate investors, especially those who are self-employed or own multiple properties.
How does a DSCR loan work?
The lender calculates the ratio like this:
DSCR = Monthly Rent ÷ Monthly PITIA
(Principal, Interest, Taxes, Insurance, and HOA)
If the result is 1.0 or higher, the property supports itself. Higher ratios usually mean better pricing.
Do DSCR loans require income verification?
No. DSCR loans do not require personal income documentation like tax returns or pay stubs. This is a big advantage for investors in Virginia who use depreciation or business write-offs.
What DSCR is required to qualify?
Most lenders look for a DSCR of at least 1.0.
A 1.25 or higher typically qualifies for the best terms. Some lenders may allow lower ratios with strong credit and reserves.
What credit score is needed for a DSCR loan in Virginia?
Many DSCR loan programs start in the mid-600s, but borrowers with 700+ credit scores generally receive better rates and terms.
How much down payment is required?
Most DSCR loans require 20–25% down, depending on the property type, credit profile, and cash flow. Strong deals may qualify for higher leverage.
Are DSCR loan rates higher than conventional loans?
Yes. DSCR loan rates are usually higher than conventional investment loans. The trade-off is flexibility — fewer income rules, easier scaling, and faster approvals.
Can I use a DSCR loan if I own multiple properties?
Yes. DSCR loans do not use a traditional debt-to-income ratio, which makes them ideal for investors with multiple rental properties across Virginia.
Can DSCR loans be used with an LLC?
In most cases, yes. Many DSCR lenders allow properties to be held in an LLC or business entity, which is common for Virginia real estate investors.
What types of properties qualify for DSCR loans?
DSCR loans in Virginia can typically be used for:
Single-family rental properties
Duplexes, triplexes, and fourplexes
Small multifamily properties
Condos and townhomes
Short-term rentals (Airbnb/VRBO with proper income support)
Are DSCR loans good for Virginia real estate investors?
They can be — especially if your properties cash flow and your personal income doesn’t tell the full story on paper. DSCR loans are designed to help investors buy, refinance, and scale rental portfolios without getting stuck on income limits.
Bottom Line
DSCR loans focus on property performance, not pay stubs. If you’re investing in rental properties in Virginia or the Hampton Roads area and the numbers make sense, this type of loan can be a powerful tool.
Want to See If a DSCR Loan Works for Your Virginia Property?
Every deal is different. The fastest way to know is to run the numbers.
If you’re buying or refinancing an investment property in Virginia Beach, Norfolk, Chesapeake, Suffolk, or the surrounding areas, I’m happy to help you explore your options.