Two very different loans for investment property. DSCR qualifies on the property's rental income; conventional qualifies on your personal income. Here's how to pick.
Get a Rate Quote →The two most common loan types for investment property are DSCR (Debt Service Coverage Ratio) loans and conventional mortgages. They're built for different investor situations. Here's how they stack up:
Consider an investor building a 15-property rental portfolio:
Properties 1-10: Could be financed conventionally at low rates, but each loan requires full documentation (tax returns, W-2s), takes 30-45 days, and counts toward Fannie/Freddie's 10-loan cap.
Properties 11-15: Impossible with conventional — you've hit the cap. You must use DSCR, commercial, or portfolio loans. These close faster, qualify on the property rather than the borrower, and have no cap on number of properties.
Many serious investors use conventional for the first 5-8 properties to get the lowest rates, then transition entirely to DSCR for portfolio scaling. LendingStreet's 30+ capital sources include multiple DSCR providers competing on rate — so scaling from conventional to DSCR doesn't mean accepting worse pricing, it means accessing capital that wasn't available before.
Use a DSCR loan when you're self-employed, have write-offs that reduce taxable income, already have 4+ financed properties (approaching conventional limits), want to borrow in an LLC, need to close faster, or are buying properties that don't qualify for conventional financing (5+ unit multifamily, certain STRs).
DSCR rates can be higher than conventional at the same credit score — typically 0.5-1.5% above. However, the ease of qualification and speed often justifies the premium for investor portfolios. At 720+ FICO with strong DSCR, rates become very competitive.
Yes. Many investors refinance from conventional to DSCR to free up conventional slots (Fannie/Freddie count each financed property against the 10-loan limit). DSCR loans don't count toward those limits.
Yes — typically 6 months of PITIA (principal, interest, taxes, insurance, association fees) in reserves after closing. Conventional mortgages require less reserves (usually 2 months).
DSCR by far. You can scale to 20+, 50+, even 100+ properties with DSCR. Conventional caps at 10 total financed properties per Fannie/Freddie rules. For serious rental investors, DSCR is the only option past property #10.
Most investors qualify for both. We'll quote you rates side-by-side from our 30+ capital sources so you can see the tradeoffs clearly.
Get Side-by-Side Quotes →No credit pull. No commitment. Speak with a licensed financing firm that knows the Texas investor market.
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By clicking Check My Eligibility, you are providing express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone call, or email, possibly using automated technology, to the number and email you provided, regarding your loan inquiry (including marketing and customer care messages). If you wish to opt out, reply “STOP” to any text. Text “HELP” for help. Message frequency may vary. Message and data rates may apply. Consent is not required to obtain services. See our Privacy Policy and Terms & Conditions.
Investment Property Only • 660+ FICO • $200K+ Loans
🔒 SSL Secured · 256-bit Encryption · ✓ Investment Properties
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