Loan programs → DSCR loans → DSCR purchase loans
DSCR purchase loans
A DSCR purchase loan buys a rental and qualifies on the property’s expected rent, not your personal income. Capstone Connectors is an Asheville private money broker: we connect you with lending partners who fund that purchase. We do not lend.
In short
- →You are buying. You do not own it yet. You bring the down payment.
- →Typically 20–25% down, plus reserves. Some guides go to about 80–85% of value on a strong purchase.
- →The rent has to cover the payment. How that ratio is read is on the DSCR loan page, not repeated as a second definition here.
- →Business-purpose investment property only. Not a home you will live in. Not North Dakota or South Dakota.
Reviewed by Derek Simkins, an Asheville private money broker. He matches the purchase. He does not lend. Last updated October 21, 2026.
The purchase
What this loan is doing at the closing table.
A DSCR purchase pays the seller. You become the owner of an investment rental. The partner’s question is whether the rent covers the payment you are about to create, not whether your job income covers your personal debts. That is the entire product. The letters, the formula, and the bands around 1.0, 1.25, and 0.75 are on the DSCR loan page. Use them. This page is about the buy: contract, down payment, which rent counts, and what does not belong in a purchase at all.
It is a long-term hold. The rates page does not give it a 6-month term. You are not drawing a rehab budget. If the property cannot be rented in its current condition, stop and look at a fix and flip loan. Coming back later to pull equity is a DSCR cash-out refinance, which is a second closing, not a feature hiding inside this one.
The sequence
How a DSCR purchase actually goes.
- 01
Contract on a property that can already be rented.
Single-family, or small multifamily where the partner goes that far, or a condo, townhome, or planned-unit development they allow. Price, condition, and whether a tenant is staying. A gut job is a different loan. Land is a different loan.
- 02
Write down the rent the partner is likely to use.
Lease in hand, market rent, or a short-term history. If both a lease and a market rent exist, expect the lower one to be the candidate. Do not use the rent you will charge after you renovate a kitchen this loan is not going to fund.
- 03
See if that rent covers the payment at a down payment you actually have.
Typically 20–25% down, plus reserves of often a few months of the full payment. A stronger ratio and stronger credit are how some guides get toward 15% down, inside an 80–85% loan-to-value. A weak ratio moves the other way, or the partner says no. Build the payment with taxes, insurance, and dues. Principal and interest alone will flatter you.
- 04
Send the contract. Capstone makes one introduction.
Derek looks at the property, the rent, the cash, and whether you have done this before. First purchases are normal when the ratio is clean. He matches a lending partner. He does not approve the loan and he does not fund it. On a clean file, closing is days, not weeks. The appraisal and the rent schedule are what usually take the time.
- 05
You close, and the hold starts.
Down payment and costs wire. Title transfers. Often the buyer is an LLC, and you still sign a personal guarantee. Then the payment exists whether the unit is full or not. Prepayment language, often one to five years, matters if you already know you will refinance or sell soon. Read it on this loan, not on the next one.
Example
Example: 25% down is a dollar figure, not a vibe.
Example only. Invented price. Not a listing, not a client, not a quote. Twenty-five percent sits at the top of the “typically 20–25%” range this site already publishes. A partner can ask for more. A guide that allows 80–85% loan-to-value is how some files land closer to 15% down. This example does not assume you are that file.
| Purchase price | $300,000 |
|---|---|
| 25% down | $75,000 |
| Loan | $225,000, which is 75% of price |
| Still not in the loan | Closing costs, and reserves of a few months of the full payment |
The $75,000 is not your all-in cash. Add closing costs. Add reserves — one guide says about three months of principal, interest, taxes, insurance, and dues, and more if the ratio is under 1.0. Then run the ratio on the $225,000 loan’s actual payment, using rent the appraisal will support. If that rent does not cover it, the way through is a larger down payment, a cheaper property, or a no. It is not a pep talk.
What the partner weighs on a buy
Ratio, rent evidence, cash, credit, property.
The ratio on this loan, not on a loan you wish you were getting. Rent divided by the full payment. Many partners want about 1.0 or better. Some will look at roughly 0.75 with a higher rate and more cash left in the bank. The floor is theirs.
Evidence for the rent. Lease, market rent, or a short-term history they have a program for. A spreadsheet of “what similar Airbnbs did in peak season” is a conversation, not income, until that partner says it is.
Cash. Down payment in the typical 20–25% band unless their guide and your file support something else, plus reserves that survive the closing. Proof of funds is the document, not a verbal “I can get it.”
Credit. Common guide floors in the low-to-mid 600s, some citing 620–640. Higher is priced better. Credit is not irrelevant because income documents are light.
The building. Rentable now. Insurable. A type they buy. Condition problems that need a budget are a flip, then a refinance, not a purchase program with a wink.
Fit
Who a DSCR purchase is for.
An investor buying a rental to hold, including a first rental when the numbers are clean. Someone whose tax return is a bad picture of the deal — self-employed, or already living on rental income — and who would rather the property qualify. Someone adding another property past the point where a conventional cap, often around ten financed properties, starts to pinch. “Often” is the published word. Confirm the cap with the partner on your file.
Not a house you will occupy. Not a second home. Not a remodel you need funded in draws. Not land. Not North Dakota or South Dakota. Capstone is in Asheville and places rentals for investors in North Carolina. We do not publish a city page for the town the house sits in.
Business-purpose, non-owner-occupied investment property loans only. Not for primary residences, second homes, or consumer loans.
Documents and the broker
What to send, and what happens next.
- —Purchase contract.
- —Lease or rent roll if occupied. If vacant, the comps you think support the rent — the appraisal will have its own.
- —Proof of funds for down payment, closing costs, and reserves, as separate capacity.
- —LLC documents if that is the buyer: operating agreement and EIN.
- —Government-issued ID. Insurance will be a closing condition.
Derek Simkins is the broker. He matches the contract to a partner who buys rentals on the ratio, not to a hard-money desk that wants a rehab budget. He will say if the down payment you have cannot reach their leverage, or if the rent only works if everyone ignores taxes. Compensation is paid by the funding lender at closing and disclosed in writing before you close. He does not lend.
A no at this stage is cheaper than an appraisal on a contract you cannot close. Send the address, the price, the rent, and the cash you have.
Mistakes
How purchase files fall apart.
The rent is post-renovation.
The loan you are applying for will not fund the renovation. The ratio has to work on the property you are buying this month.
Down payment and reserves are the same dollars.
Closing spends the down payment. The reserve has to still be there the next morning. Partners notice.
The payment used to “qualify” skipped taxes.
PITIA includes them. A 1.25 that becomes a 0.9 once insurance is in the payment was never a 1.25.
It was a primary residence with rental vocabulary.
Occupying the property pulls the loan out of this product. We will not place it.
Compared
A DSCR purchase next to the loans people confuse it with.
| DSCR purchase | Conventional purchase | Fix and flip | DSCR cash-out | |
|---|---|---|---|---|
| Qualifies on | Expected rent | Your income | The deal and the exit | Rent on a property you own |
| Cash in | Typically 20–25% down, plus reserves | Their down payment, often with mortgage insurance below 20% | Closing costs and reserves. Up to 100% of cost is not zero cash | You may receive cash, after costs |
| Rehab | No. The property should rent now | Not this conversation | Yes, in draws | Already done, if it needed any |
Conventional financing can be the cheaper loan when you have the income documents and you want that rate. DSCR is the loan when the property is the underwriting and you accept a higher rate for that. We do not claim one beats the other on price.
Questions
DSCR purchase loan questions.
What is a DSCR purchase loan?
A DSCR purchase loan buys an investment rental. The lending partner qualifies it on the property’s expected rent, not on your W-2 or tax return. The ratio, the 1.0 line, and the cases that go down toward 0.75 are explained on the DSCR loan page. This page is only the purchase. Capstone connects you with the partner. We do not lend.
How does a DSCR purchase loan work?
You go under contract on a rental, with a rent you can support. The partner divides that rent by the full monthly payment of the loan you would take. If the ratio, your credit, and your reserves fit their box, they lend and you bring the down payment. You close, often in an LLC, and you own a rental. You do not get rehab draws. A property that still needs a renovation is a fix and flip loan first.
How much do I have to put down?
Typically 20–25% on a purchase, plus reserves. There is no universal 20% rule. Some lender guides advertise up to about 80–85% of value on a strong purchase, which is roughly 15–25% down. A lower ratio or weaker credit generally means more cash in. The matched partner sets the figure. It is not a Capstone promotion.
How is a purchase different from a DSCR cash-out refinance?
A purchase buys a rental you do not own yet, and you bring the down payment. A cash-out refinance is for a rental already in your name, and it can pay equity out, often at tighter leverage. One guide cites 70–75% of value on cash-out. Both qualify on the rent. If you already own it, use the cash-out page.
What rent counts when I am buying?
The rent the partner will accept. A lease if the tenant stays, market rent from the appraisal if it is vacant, or a short-term rental history if that program allows it. Documented rent or market rent, depending on the lender and the deal. A number you hope to get after a renovation is not purchase-loan income. Renovate on a flip loan, then refinance.
Can I buy a short-term rental with a DSCR loan?
Many lenders have a program for short-term rentals. The income they count is their rule, and a peak month is a bad stand-in for the year, especially somewhere seasonal like Asheville. Long-term leases are the simpler file. Say which one you are buying on the inquiry so the introduction goes to a partner who actually does that income.
What property can I buy?
Commonly a single-family rental, small multifamily at lenders who go from 2 to 9 units, a condo, a townhome, or a planned-unit development. Generally not a fixer-upper, not raw land, and not a house you will live in. If the inspection says it needs a rehab budget before it can rent, you are on the wrong page.
What credit score and reserves does a purchase need?
Guides commonly start in the low-to-mid 600s. Some cite 620–640. Better scores price better and can allow more leverage. Reserves are often a few months of the full payment. One guide cites about three months of PITIA, and more if the ratio is under 1.0. Bring the down payment and the reserves as separate cash. One pile of money cannot be both.
What will the rate and the prepayment look like?
Higher than an owner-occupied conventional loan is the honest line. One lender guide published fixed DSCR rates of 6–7.5% in mid-2026. That is not a Capstone offer. Prepayment terms are common, often one to five years. A point is 1% of the loan. We do not publish a single origination-point number. The partner on your purchase sets all three: rate, points, and prepayment.
Can I buy it in an LLC, and can I live in it?
Many partners let you close in an LLC. You will typically still sign a personal guarantee. You cannot live in it as a primary residence or a second home. Business-purpose, non-owner-occupied investment property only. Capstone does not place DSCR purchase loans on property in North Dakota or South Dakota.
What documents should I have ready?
The purchase contract, rent support or a vacant-unit market-rent story, proof of funds for the down payment and reserves, entity documents if an LLC will buy, and government-issued ID. Insurance is required before closing. The partner orders the appraisal and title. You do not assemble a tax-return package as the way you qualify. You do not skip the rest.
What if I wanted to flip it instead?
Then it is not this loan. A fix and flip loan is short-term, funds purchase plus rehab in draws, and is capped at 70% of after-repair value. A DSCR purchase is for a rental you will hold. If the plan is to renovate and then hold, do the work on the flip loan and refinance with a DSCR cash-out once it is rented. Do not ask a purchase program to fund a gut rehab.
Buying a rental to hold?
Talk to Derek. Send the contract, the rent, and the cash you have for the down payment and reserves. If the ratio works, we match you to a lending partner who underwrites the purchase on the income. If it does not, you hear which input is wrong.
Talk to Derek