On this page
- DSCR vs conventional loan: the rules side by side
- Is a DSCR loan a conventional loan?
- How a DSCR lender qualifies the property
- Which rent counts
- Down payment: 15% vs 20%
- Monthly payment compared
- The 10-property limit and reserves
- DSCR loan rates vs conventional loan rates
- Prepayment penalties
- Property types
- When each loan fits
- Switching and paying off early
- Related guides
- Frequently asked questions
Based on each lender's published information; we did not apply for loans.
DSCR vs conventional loan: the rules side by side
In this comparison, "conventional" means a loan made to Fannie Mae's rules: its Selling Guide B2-2-03, Selling Guide B3-4.1-01 and Eligibility Matrix, August 5, 2026. The DSCR column uses each lender's own published terms.
| Rule | Conventional loan (Fannie Mae) | DSCR loan (lenders' published terms) |
|---|---|---|
| How you qualify | Your income and debts | The property's cash flow. Ternus: no income docs, no W-2s, no tax returns |
| Max loan-to-value, investment purchase | 85% (1 unit); 75% (2 to 4 units) (Eligibility Matrix, August 5, 2026) | 80% at Kiavi, Lima One and Ternus; 85% at Visio Lending |
| Smallest down payment on a purchase | 15% (1 unit); 25% (2 to 4 units), computed from the maximum LTV | 20% at most lenders; 15% at Visio Lending, and at Griffin Funding with 740+ credit |
| Rate-and-term refinance | 75% (limited cash-out, 1 to 4 units) | 80% at Lima One and Ternus |
| Cash-out refinance | 75% (1 unit); 70% (2 to 4 units) | 75% at Lima One and Ternus |
| Financed properties | Up to 10 with Desktop Underwriter for a second home or investment property (Selling Guide B2-2-03) | Set by each lender |
| Reserves | 6 months for an investment property transaction, plus 2%, 4% or 6% of the unpaid balance of your other financed properties, the share set by how many financed properties you have in total (Selling Guide B3-4.1-01) | Griffin Funding: ratios below 1.0 funded with reserves |
| Minimum DSCR | Not part of the Fannie Mae rules cited here | 0.75 (LendingOne, New Silver) to 1.25x (Upright, 5 to 10 units); none at Easy Street Capital and Griffin Funding |
| Borrower | Rules not covered in the sources cited here | LLC, LP or corporation with an individual guarantor (Ternus) |
| Occupancy | Principal residence, second home or investment property | Investment only; Easy Street Capital says occupying the property is strictly prohibited |
Fannie Mae figures are for loans underwritten with Desktop Underwriter (DU), standard eligibility. Lender figures read October 29, 2026. Not financial advice.
Is a DSCR loan a conventional loan?
Not in the sense used here. A conventional investment loan is underwritten to Fannie Mae's eligibility rules on your income. A DSCR loan is a business-purpose loan on a rental, qualified on the property's cash flow instead of your income documents, and usually closed in an entity: LendingOne describes its DSCR loans as "Business-purpose loans, close under an LLC", and Easy Street Capital says its rental loans are strictly business-purpose. Under the official interpretation of Regulation Z (comment 3(a)-4), credit to buy or maintain a rental that is not owner-occupied is deemed business purpose, but not if the owner expects to live there more than 14 days in the coming year.
How a DSCR lender qualifies the property
Where a conventional lender divides your monthly debts by your income, a DSCR lender divides the property's rent by its payment. Example: rent of $2,100 a month on a $240,000 loan at Griffin Funding's 7.125% 30-year fixed rate, with $3,600 a year in taxes and $1,500 in insurance (example inputs). Principal and interest are $1,616.92 and PITIA $2,041.92, so the DSCR is $2,100 / $2,041.92 = 1.02 (rounded down).
That clears the published DSCR rule at 11 of the 12 lenders that state one (2 of them set no minimum); it falls short at Groundfloor. Each lender's minimum, leverage and credit floor:
| Lender | Min DSCR | Max loan-to-value | Min credit score |
|---|---|---|---|
| Easy Street Capital | No minimum | 80% purchase; 75% cash-out | 640 |
| Griffin Funding | No minimum; no-ratio program | Down payment as low as 15% at 740+ credit; 80% cash-out | 620 |
| Upright | 0.90x (1.15x for short-term rentals; 1.25x for 5 to 10 units) | 80% purchase; 75% cash-out (cash-out capped at $1M) | 660 |
| RCN Capital | 1.00 | 80% purchase (lower below 700 credit); 75% cash-out | 660 |
| New Silver | 0.75 | 80% of purchase price | 660 |
| Kiavi | 0.8x | Up to 80% | Not stated |
| Express Capital Financing | 1.0x (its table also reads 'No DSCR Available') | 85% purchase (its FAQ calls 85% rare); 75% cash-out | 650 |
| Lima One Capital | 1.0 | 80% purchase; 75% cash-out | 660 |
| LendingOne | As low as 0.75 | 80% purchase; 75% cash-out | Not stated |
| CoreVest | 0.80x | Up to 80% of value | Typically 640 (its FAQ; some programs 680 or 720) |
| Ternus | 1.00x at 680+ credit; 1.15x at 650 to 679 | 80% purchase; 75% cash-out | 650 |
| Groundfloor | 1.1 | Up to 80% | 660 |
| Visio Lending | Not stated | 15% minimum down (its rental guide says 20% to 30%) | 680 |
As shown on our DSCR loans comparison, from each lender's own pages. Run your own property in the DSCR calculator.
Turned around, the same numbers tell you the rent you need: $2,041.92 a month for a 1.00 ratio, $2,348.21 for Ternus's 1.15 at 650 to 679 credit, and $2,552.41 for Upright's 1.25x on 5 to 10 unit properties.
Which rent counts
A conventional lender verifies your income; a DSCR lender decides which rent figure goes into the ratio, and it is not always your lease:
| Lender | Rent used to qualify |
|---|---|
| Kiavi (loans made by Figure) | Uses the lower of 110% of the appraised market rent and your valid lease rent. |
| Easy Street Capital | Uses the market rent determined by the appraisal to project cash flow; vacant properties can be financed and leased after closing. |
| Lima One Capital | Forecasts market rent for new purchases and vacant properties; owners of properties already rented provide current leases and rent verification. |
| Upright | Qualifies on in-place or market rent. |
| Express Capital Financing | Looks at current leases, rent rolls, or a market rent survey from an appraiser if the property is not yet leased. |
| Griffin Funding | Qualifies short-term rentals using market rent from the appraisal, documented rental history, or AirDNA-style data. |
| Groundfloor | Evaluates property income and market rents. Its page lists a 1.1 DSCR minimum and, elsewhere on the same page, a minimum 120% coverage ratio. |
As shown on our DSCR loans comparison. If the appraiser's market rent comes in below your lease, the ratio is calculated on the lower figure at lenders like Kiavi. Groundfloor's page lists both a 1.1 DSCR minimum and a minimum 120% coverage ratio, so ask which one applies.
Down payment: 15% vs 20%
Fannie Mae allows a higher loan-to-value on a single-unit investment purchase than most DSCR lenders publish. On a $300,000 purchase:
| Loan | Maximum loan | Minimum down payment |
|---|---|---|
| Conventional, 1 unit (85% LTV) | $255,000 | $45,000 |
| DSCR at 80% LTV (Kiavi, Lima One, Ternus) | $240,000 | $60,000 |
| DSCR at 85% LTV (Visio Lending) | $255,000 | $45,000 |
| Conventional, 2 to 4 units (75% LTV) | $225,000 | $75,000 |
Closing costs and reserves come on top in both cases. DSCR lenders also tie leverage to credit: Griffin Funding offers 15% down only at 740 and above.
Monthly payment compared
Principal and interest on the same $300,000 purchase. The conventional line uses Freddie Mac's survey average, not a quote, and the DSCR lines use lenders' published starting rates, so treat this as a rough guide:
| Loan | Loan amount | Rate | Monthly principal and interest | Down payment |
|---|---|---|---|---|
| Conventional, 85% LTV, at Freddie Mac's 30-year average | $255,000 | 7.24% | $1,737.82 | $45,000 |
| DSCR, 80% LTV, at Griffin Funding's 30-year fixed | $240,000 | 7.125% | $1,616.92 | $60,000 |
| DSCR, 80% LTV, at Kiavi's starting rate | $240,000 | 6.375% | $1,497.29 | $60,000 |
The larger conventional loan carries the highest payment here, but it also needs $15,000 less down. Taxes, insurance and any mortgage insurance or lender fees come on top.
The 10-property limit and reserves
Fannie Mae's Selling Guide B2-2-03 caps a borrower at 10 financed properties through DU when the loan is for a second home or investment property (there is no limit for principal residence loans other than HomeReady). Its Selling Guide B3-4.1-01 adds reserves: six months for an investment property transaction, plus a share of the unpaid balance (UPB) on your other financed properties (not the property you are buying and not your home), with the share set by how many financed properties you have in total. If those other loans total $500,000:
| Financed properties you will have (including this one and your home) | Extra reserves | On $500,000 UPB of the others |
|---|---|---|
| 1 to 4 | 2% | $10,000 |
| 5 to 6 | 4% | $20,000 |
| 7 to 10 (DU only) | 6% | $30,000 |
DSCR lenders set reserves their own way: Griffin Funding says it funds ratios below 1.0 with reserves, so cash in the bank can stand in for some of the rent. DSCR lenders also do not use Fannie Mae's property count, which is why investors with many rentals often move to them; each lender sets its own portfolio rules.
DSCR loan rates vs conventional loan rates
Freddie Mac's weekly survey put the 30-year fixed average at 7.24% as of October 29, 2026 (Freddie Mac PMMS). Published DSCR starting rates we read run from 5.75% (Easy Street Capital, dated September 2025) to 6.875% (New Silver), with Griffin Funding's 30-year fixed from 7.125%. Those are best-case starting rates, not averages, so compare quotes for your own file. Every lender's figure and date is on the DSCR loan rates page.
Prepayment penalties
The Fannie Mae rules cited here do not address prepayment penalties. On DSCR loans they are common and are often part of the price, because a longer penalty can buy a lower rate:
| Lender | Prepayment penalty |
|---|---|
| Kiavi | None after year 3 |
| LendingOne | Penalty periods from zero to five years |
| Upright | Choose 0, 1, 2, 3, 4 or 5 years |
| Easy Street Capital | Typically 5/4/3/2/1: 5% of the remaining balance in year one |
| Express Capital Financing | None, 1-0-0, 3-0-0, 3-2-1 or 5-4-3-2-1 |
| Lima One Capital | A higher fee or rate buys a low or no penalty option |
| Griffin Funding | No-prepayment-penalty options; rate depends on the penalty term |
On a $240,000 loan at 7.125%, the balance after one year is about $237,620, so a 5% first-year penalty under a 5/4/3/2/1 structure would be about $11,881. If you may sell or refinance within five years, compare the no-penalty price.
Property types
Fannie Mae's investment limits split 1 unit (85% LTV on a purchase) from 2 to 4 units (75%). DSCR lenders draw their own lines: New Silver's DSCR loan covers residential 1 to 8 units, and Upright lends on 5 to 10 unit properties at a 1.25x minimum DSCR. Bigger buildings move to commercial and multifamily lenders.
When each loan fits
Conventional fits when
- Your tax returns show enough income to qualify.
- You want the lowest down payment on a 1-unit rental (15%).
- You have fewer than 10 financed properties.
DSCR fits when
- Your income is hard to document, but the rent covers the payment.
- You want to borrow in an LLC.
- You have reached Fannie Mae's property limit or want fast, property-based underwriting.
Switching and paying off early
To move from a DSCR loan to a conventional loan you refinance, and the new loan must meet Fannie Mae's limits: 75% of value on a limited cash-out refinance, 75% (1 unit) or 70% (2 to 4 units) on cash-out. Check the DSCR loan's prepayment penalty first: Kiavi has none after year 3, LendingOne offers penalty periods from zero to five years, Easy Street Capital's typical structure is 5/4/3/2/1, and Lima One offers a low or no penalty for a higher fee or rate. See DSCR loan pros and cons and DSCR loans compared.
Related guides
Frequently asked questions
Is a DSCR loan a conventional loan?
No. A conventional investment loan follows Fannie Mae's eligibility rules and qualifies you on your income. A DSCR loan is a business-purpose loan that qualifies on the rental's cash flow, often closed in an LLC.
What's the downside of a DSCR loan?
Usually a higher down payment than Fannie Mae's 15% minimum on a 1-unit investment purchase (most DSCR lenders cap purchases at 80% of value), prepayment penalties on many loans, and investment property only.
Do DSCR loans require 20% down?
At most lenders, yes: Kiavi, Lima One and Ternus lend up to 80% on purchases. Visio Lending offers 85% LTV purchase loans, and Griffin Funding goes to 15% down at 740+ credit.
Can a DSCR loan be converted to a conventional loan?
Not converted, but refinanced, if you qualify under Fannie Mae's rules: up to 75% of value on a limited cash-out refinance and 75% on a 1-unit cash-out refinance. Check the DSCR loan's prepayment penalty first.
How many financed properties can you have with conventional loans?
Fannie Mae's Selling Guide B2-2-03 allows up to 10 financed properties through Desktop Underwriter when the new loan is for a second home or investment property. DSCR lenders are not bound by that limit.
Can you pay off a DSCR loan early?
Yes, but many carry a penalty. Kiavi has none after year 3, LendingOne offers zero to five year penalty periods, and Easy Street Capital's typical structure is 5/4/3/2/1.