​DSCR Loans for Low Credit: When the Bank Says No, We Say 'Watch This'

Can you get a DSCR loan with low credit?

Yes. You just need to find a lender that doesn’t flinch at a credit score in the 500s. Most banks and conventional lenders require a 660+ score for DSCR loans. We don't. If your property cash flows, we look at that — not your FICO.

What is the minimum credit score for a DSCR loan?

With most lenders? 660. With us? As low as 500, sometimes lower with compensating factors. This program was built for real-world investors who may have hit a credit snag but still own real estate that’s making money.

Is it hard to qualify for a DSCR loan with low credit?

Not if you work with the right lender. Qualification is based on your property's income, not yours. If your investment generates enough rent to cover the mortgage, you're already ahead.

Do DSCR loans check your credit?

Yes, but the credit score is just one piece of the puzzle. We're more interested in your property's income potential than your 30-day late car payment from 5 years ago. And we never judge you for a rough patch. 

Can I get approved for a rental property with low credit?

Absolutely. Especially if you own the property free and clear or have significant equity. A DSCR cash-out refi can tap into that equity and convert it into funding for your next move.

Can I live in a home bought with a DSCR loan?

No. DSCR loans are for investment properties only. If you want to live in it, this isn't your loan.

What are the downsides of DSCR loans?

You might pay a higher rate than a full-doc loan, and terms can vary by lender. But if your other option is "get denied," then the tradeoff is worth it. Also, prepayment penalties may apply. Ask upfront.

What kind of down payment do I need with low credit?

If you're buying a property, most DSCR loans require 20% down, but this usually requires a FICO of 660 or higher. If your credit score is lower, then your down payment can change a bit.  Here's an example: *

• FICO - Below 600 - Max LTV - 50%  (50% Down Payment)

• FICO - 600-619 - Max LTV - 60%  (40% Down Payment)  

• FICO - 620-639 - Max LTV - 65%  (35% Down Payment)
• FICO - 640-659 - Max LTV - 75%  (25% Down Payment)

      * LTV and FICO scores are subject to change. Always contact us to discuss your scenario.

Own the property already? We can also do cash-out refinances, even with low credit. 

Why do most banks say no to borrowers with low credit?

Because they underwrite to a risk box that was never meant for investors. If your credit drops below 660, most DSCR lenders won’t touch the file. That’s where we come in.

What makes your program different?

We built a DSCR loan specifically for investors with bruised credit. No fluff. No lectures. Just a focus on rental income, property value, and strategy. You’re not just a FICO score to us, you’re a portfolio in motion.

What can I use the cash for?

With this DSCR loan program, you can use the cash in any way you see fit. Consolidate debts, fix your credit, pay off maturing notes, redeploy capital to your next venture, and avoid the hamster wheel of hard money.

🧠 What’s a smart strategy?

Here’s a classic move we see with our investor clients: Refinance the home now, use the cash for your next venture, and save some for balancing out your revolving accounts like credit lines or HELOCs. Then, refinance again into even better terms down the road.

💡 Final word?

Remember that this loan is a financial tool. And like any tool, how you use it makes all the difference. So use it right.

"Bad credit" doesn’t mean "bad investor". If your property cash flows and your strategy makes sense, we’ll fight for your loan when the others won’t. 

Need help running the numbers on a property you already own? 

Reach out. We do this every day.

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📌  You can also drop us a line HERE »

Yours in successful homeownership,

Derek Bissen
Loan Originator
NMLS#365627
Unconventional Lending Program Director

Derek Bissen is a licensed Mortgage Loan Originator with over 25 years of experience in the industry. Derek is a self-employed lending expert who is known for his ability to work with borrowers who have substantial wealth and non-traditional lending needs. He is a creative loan structurer and specializes in portfolio lending, asset-based lending, bank statement lending, as well as traditional loans such as Conventional, FHA, VA, and first-time homebuyers. Derek's expertise in the mortgage industry is unparalleled. He is a trusted advisor to his clients, providing them with customized loan solutions that meet their unique financial goals and needs. His vast experience and knowledge make him a valuable asset to anyone looking to purchase a home or refinance their existing mortgage. As a highly-experienced loan originator and author, Derek is committed to sharing his knowledge with others. He regularly provides valuable insights and advice to readers looking to navigate the complex world of mortgage lending. His articles are informative, engaging, and backed by years of hands-on experience. With his wealth of knowledge and dedication to his clients, he is the go-to source for all your mortgage lending needs. If you're looking for a reliable and trustworthy mortgage expert, contact Derek today to learn more about how he can help you achieve your financial goals.