Specialty Loans
DSCR (Debt Service Coverage Ratio)
Investment property? Let the rental income qualify the loan.
DSCR loans are built for real estate investors. The loan is qualified by the property's rental income vs. its mortgage payment — not your personal tax returns. It's the single most important product for scaling a Washington rental portfolio.
Key Features
- • No personal income documentation
- • Qualified by property rental income
- • No limit on number of financed properties
- • Close in LLC, LP, or S-Corp
- • Short-term rental (Airbnb) income accepted
- • Down payments from 20%
How it works
The lender orders an appraisal with a rent schedule (Form 1007), pulls credit, verifies reserves (typically 6 months PITIA), and underwrites to the DSCR ratio. No W-2s, no tax returns, no employment verification. The loan is non-recourse-at-the-entity-level on most LLC closings (with a personal guarantee), so the underwriting focuses on the asset, not your day job.
What this looks like in Washington
Tacoma, Spokane, Federal Way, Lakewood, Bremerton, Vancouver, and Yakima are some of the most active DSCR markets in WA — rent-to-price ratios in those areas pencil for landlords in a way Seattle and Bellevue often don't. Seattle and Eastside DSCR deals usually work better with mid-term furnished rentals or duplex/triplex configurations. Short-term rental DSCR is hot in destination markets like Leavenworth, Chelan, the Methow Valley, and the San Juans — but verify city STR licensing before assuming the income.
Pros
- • Scale past the 10-property conventional cap
- • Close in an LLC
- • No personal income or DTI
- • Airbnb/STR income accepted
Cons
- • Rates 0.75–1.5% above conventional investment
- • Higher down payment (20%+)
- • 6-month PITIA reserve typical
- • Personal guarantee usually required
Best for: Active WA real estate investors building a portfolio, scaling past 4–5 doors, or using entity-level structures for liability protection.
Common Questions
Related Loan Types
Popular WA markets for DSCR (Debt Service Coverage Ratio)
DSCR investor loans pencil best in WA's stronger rent-to-price markets — Tacoma, Spokane, Federal Way, Vancouver, and the Tri-Cities. Seattle and Bellevue work too, usually with mid-term or duplex configurations.