Investment Property Loans | Non-QM, DSCR, No-Doc Mortgages

In this article, we will cover and discuss traditional and non-prime investment property loans. What Are The Eligibility Mortgage Guidelines On Investment Property Loans?  There are traditional investment property loans that must conform to Fannie Mae and Freddie Mac agency guidelines. However, most non-prime investment property loans are non-traditional investment property loans where each wholesale mortgage lender has its own lending guidelines.

Investment Property Loans Explained

Whether you’re buying a single-family rental, a multi-unit building, or a vacation home to rent, an investment property loan is the financing tool you need. These loans focus less on your personal income and more on the property. That’s why the bank looks at expected rental income, market rents, property value, and your track record as an investor. Investors who know the rules know they can move even more quickly.  

When Traditional Underwriting Falls Short

Homeowners share mortgage underwriting stories that often leave the real estate investors scratching their heads. Taxes, low personal income, an incomplete asset statement, or even unexplained gaps in employment. If your deal looks rules-adverse, traditional banks often flat-out decline your mortgage and suggest you need a stronger paycheck. That’s an easy “no” to stomach when buying your first single-family investment. However, it becomes a loud “shut-out” when you’re assembling a portfolio.  

Specialized Financing Programs to Rescue the Deal

Instead of accepting the traditional red stamp, savvy property investors now turn to programs that blend mortgage and income strategies.

• Non-QM loans are designed to go beyond the Fannie and Freddie income ratios and allow you to bypass the mandatory full documentation of all your income.
• DSCR loans only pay attention to the Debt-Service Coverage Ratio, checking that projected rental income covers the mortgage on the property, and nothing personal touches the FICO.
• No-Doc mortgages ignore most burdensome tax, wage, or asset details—they focus on your confidence in moving the deal and the property.

Key Features of Investment Property Loans

• You can borrow a larger sum than with a primary home mortgage.
• Loans work for single-family homes, condos, 2–4 unit properties, and larger multifamily buildings.
• Lenders offer options for quick flips or properties meant for years of holding.
• Underwriting terms can shift with each program, so compare your choices.

Non-QM Loans for Real Estate Investors

What Are Non-QM Investment Loans?

Non-QM stands for Non-Qualified Mortgage, a product for borrowers who don’t meet strict agency guidelines. Self-employed buyers, multiple income streams, or recent financial changes can find a fit here.

Benefits of Non-QM Loans

• Provide income with recent bank statements or a record of cash flow.
• Debt ratios can stretch beyond the 43% ceiling in typical deals.
• Recent credit hiccups, like a quick foreclosure, may still qualify.
• Buy a property under your LLC or corporation’s name immediately.

DSCR Loans: Debt Service Coverage Ratio Explained

How DSCR Loans Work

A DSCR loan uses the rental income from your new or existing property in place of your personal earnings. Lenders calculate the rent ratio to the monthly mortgage, taxes, and insurance to see if the rent covers those costs.

Why Investors Prefer DSCR Loans

• No tax returns or W-2s needed.
• Approval is based solely on the rental cash flow.
• Great for rapidly growing a rental portfolio.
• Suitable for long-term rentals and short-term rentals like Airbnb.

What Is a No-Doc Mortgage?

A no-doc mortgage let you skip submitting the usual income documents. Instead, the lender looks at your credit score, down payment, and reserves.

Benefits of No-Doc Loans

• Less paperwork and quicker closings.
• Ideal for self-employed borrowers or those with significant wealth.
• Can be used for buying, refinancing, or cashing out equity.

Selecting the Best Loan for Your Investment

Pick the Property Loan That Matches Your Strategy

• Non-QM is great for income that’s harder to fit on a tax return.
• DSCR is the way to go if the property’s rent gets you approved.
• No-doc is the right choice if you want a smooth and speedy process with less documentation.

Since every property portfolio differs, partner with a mortgage team specializing in these programs.

Why Work With Gustan Cho Associates?  

At Gustan Cho Associates, we’re a nationwide mortgage broker licensed in 48 states, giving you access to 280 wholesale lenders. With us, you’ll find every major investment loan program.

Here’s What Sets Us Apart:

• Zero overlays on FHA, VA, USDA, and Conventional loans.
• Unique Non-QM, DSCR, and No-Doc loan programs.
• Proven experience closing complicated investor scenarios that banks usually deny.
• Clear and fast loan processes with solutions that focus on you, the investor.  

Buying your first rental or adding dozens? We’ll get you financing that turns real estate into real wealth.  

FAQs on Investment Property Loans  

What’s the Minimum Down Payment for Investment Property Loans?

• You usually need at least 15–20% down, but it varies based on the loan program.  

Can I Use Rental Income to Qualify?

• Absolutely.
• DSCR loans let you qualify using projected or current rental income.  

Are Interest Rates Higher for Investment Properties?

• Yes, rates are generally higher than for owner-occupied loans.
• However, non-QM and DSCR programs offer flexible terms that still allow you to qualify.

Can I Finance an Investment Property Through my LLC?

• You sure can.
• Many Non-QM and DSCR lenders let you buy or refinance properties in the name of your LLC or corporation, making it easy to keep your liability protection intact.  

Can I Refinance to Take Cash Out for My Investment Property?

• Cash-out Cash-out refinancing is definitely a popular move.
• It allows you to access equity to buy your next deal or upgrade your existing rental.  

Real estate investors need financing that changes with their strategy. That’s why loans like Non-QM, DSCR, and No-Doc allow you to grow your wealth, broaden your holdings, and do things your way, not the bank’s.  

No-Doc Investment Property Loans

One of the great benefits of non-prime portfolio loans is the guidelines are not set in stone. Portfolio lenders can and often make exemptions on investment property loans. There are no set mortgage guidelines for investment property loans.

Investment Property Loans made simple. Learn about Non-QM, DSCR, and No-Doc mortgages with flexible guidelines from Gustan Cho Associates.

Investment property loans are portfolio loans. Gustan Cho Associates has launched dozens of non-QM loan programs for investment properties.

Top Non-QM Lenders For Investment Property Loans

Gustan Cho Associates has over 280 wholesale mortgage lenders for investment property loans. Gustan Cho NMLS 873293 has decades of experience in owning, managing, operating, and financing investment property loans. There are two categories of investment property loans: Full-doc and no-doc non-QM loans.

Investment property loans are tailored to different investor needs and circumstances. Full doc loans are mortgage loans that need full income documentation. No-doc loans do not require tax returns and underwriters use alternative methods to determine income.

Non-QM mortgages benefit full-time real estate investors without a steady stream of income, full-time fix and flip investors, self-employed wage earners who show little to no adjusted gross income, and borrowers who cannot source their income. In the following paragraphs, we will cover a breakdown of some common types of investment property loans.

Non-QM (Non-Qualified Mortgage) Investment Property Loans

Non-QM loans don’t meet the Consumer Financial Protection Bureau’s criteria for “qualified mortgages.” They might be suitable for investors who need to meet traditional lending requirements, such as self-employed individuals with fluctuating incomes or those with non-traditional assets.

DSCR (Debt-Service Coverage Ratio) Investment Property Loans

DSCR loans assess the property’s income-generating potential rather than the borrower’s income. Lenders typically look for a DSCR of 1.2 or higher, meaning the property’s income should be at least 120% of its mortgage payments. These loans are often used for commercial properties or multi-unit residential properties.

DSCR investor loans is not based on the individual debt-to-income ratio. Unlike Fannie Mae’s 5 to 10 Financed Properties Guidelines, there is no limit on the number of properties financed with Investment Property Loans.

Again, unlike traditional Investment Conventional Loans, Rental Property Financing and Investment Property Loans can be financed directly by an LLC. It is not only restricted to individual borrowers and co-borrowers. There are down payment and loan-to-value requirements on investment property loans. The down payment and LTV requirements are based on the borrower’s credit scores.

DSCR Loan Program Down Payment Requirements

Here are the down payment requirements for Purchases and Refinances:

• For borrowers with 700 credit scores and higher, 20% down payment is required on purchases and 80% LTV on refinances.
• For borrowers with credit scores between 680 and 699, the down payment required is 25% on purchases and 75% LTV on refinances.
• For borrowers with credit scores between 660 and 679, the down payment requirement is 30% and 70% LTV on refinances.

Minimum DSCR Loan Credit Score Requirements

The minimum DSCR Loan credit score requirements depend on the wholesale mortgage lender. Non-QM wholesale lenders on DSCR investor loans are negotiable on credit score versus down payment requirements.

Each DSCR mortgage lender has its own credit score guidelines and can make exceptions.  In general, the minimum credit score to qualify for Investment Property Loans is 640 credit scores. Borrowers under 660 can contact us and Gustan Cho Associates will help them improve and boost their credit scores to a qualifying score so they can qualify for the program.

Non-QM DSCR Rental Property Mortgage Loans

There is no limit on the number of rental properties the investor has on their portfolio. Down payment requirements are 20% to 30% depending on the borrower’s credit scores. The only thing that we go by is the property itself. Property needs to cash flow. John Strange, a senior mortgage loan originator at Gustan Cho Associates says the following about investment property loans at Gustan Cho Associates:

Over 80% of our borrowers at Gustan Cho Associates are folks who couldn’t qualify at other lenders or other lender did not have the type of investment property loans best suited for the borrower.

Investment Property Loans are available in all 50 states. It is really popular in Chicago, Illinois as well as larger cities in New Jersey, Pennsylvania, Kentucky, Mississippi, Florida, Washington, Virginia, Indiana, Wisconsin, California, Georgia, Alabama, Colorado, Michigan, Kansas, Ohio, Arizona, Washington, DC, Puerto Rico, the U.S. Virgin Islands, and the rest of the nation.

No-Doc Mortgages (No Documentation Mortgages)

No-doc mortgage loans don’t require extensive documentation of the borrower’s income, assets, or employment history. They can appeal to investors who need help providing traditional documentation but may come with higher interest rates or stricter terms. When considering non-qm and no-documentation types of loans, investors should carefully weigh the benefits and risks.

Benefits of Investment Property Loans

Flexibility: Non-QM and no-doc mortgages offer flexibility for borrowers who don’t meet traditional lending criteria. Income-based assessment: DSCR loans focus on property income rather than borrower income, which can benefit investors with multiple properties. Speed: No-doc mortgages often have quicker approval processes since they require less documentation.

Risks of Investment Property Loans

Higher interest rates: Non-traditional loans typically have higher interest rates to compensate for increased risk. Stricter terms: To mitigate risk, lenders may impose stricter terms, such as higher down payments or shorter loan terms. Michael Gracz, a senior mortgage loan officer at Gustan Cho Associates says the following about the risks of investment property loans:

Potential for over-leverage: With stringent income verification, borrowers could over-leverage themselves, leading to financial difficulties if properties perform as expected.

It’s essential for investors to thoroughly research and understand the terms and conditions of any loan before committing, as well as to consider seeking advice from financial professionals specializing in real estate investments. Additionally, investors should ensure they have a solid understanding of the property’s income potential and market dynamics to mitigate risks associated with investment property loans.

Mortgage Options on Non-QM Investment Property Loans

Gustan Cho Associates has dozens of non-QM wholesale lending partners that offer owner-occupant, second homes, and investment property loans. Many investment home financing do not require income tax returns and offer alternative income such bank statement deposits, P and L, and debt-service coverage ratio. Dale Elenteny, a senior mortgage loan originator at Gustan Cho Associates says the following about unique investment property loans at Gustan Cho Associates:

The team at GCA Mortgage Group separates itself from the competition because we offer investment property loans that others do not offer such as second mortgages, HELOCs, and time close new construction investment property loans.

We even have asset depletion, bank statement mortgages, and investor cash-flow loan programs on investment properties. Investment properties can close under a Limited Liability Corporation (LLC). In this article, we will discuss and cover financing investment property loans.

Updated Non-QM Investment Property Loans

Gustan Cho Associates has new Rental Property Financing and Investment Property Loans that have not been in the marketplace since the Real Estate and Market Collapse of 2008. Rental property investors can now qualify for rental property financing and no doc investment property loans. Borrower’s debt to income ratios does not matter.

Types of Investment Property Loans

Individual or Single Property Loans: This loan program is based on 30-year fixed rate fully amortized mortgages. Portfolio Investment Loans are portfolio property loan programs for investors who have at least 7 plus income-producing rental units. Able to purchase multiple properties or refinance or get a line of credit or the combination of purchase/refinance/line of credit based on the equity of their investment property portfolio.

Benefits of Non-QM Investment Property Loans

There are many reasons why the Investment Property Loan Program is different than any other commercial/investor mortgage program. This is a no-doc program where income verification is not required. It is solely underwritten based on the cash flow of the subject property. This unique program is underwritten based on the debt coverage ratio.

Single Investment Property Loans With No Income Documentation

The single investment property loan program is for both purchases and refinances. Here are the types of properties that can be financed:

• Single Family Homes
• Condominiums: Non-Warrantable Condominiums are allowed
• Townhomes
• Two to Four unit apartment buildings

The minimum property value needs to be $100,000 and the minimum loan amount is $75,000.

Property Debt-to-Income Ratio Requirements

This program is underwritten by the cash flow of the property and not the borrower and co-borrowers. Here is the formula of the property debt to income ratio requirements: For properties where their value is $150,000 or greater, the maximum cash flow coverage requirement is 85%. For properties where their value is less than $150,000, the maximum cash flow coverage requirement is 70%. The Cash-Flow Coverage is calculated by taking the PITIA and dividing it by the Gross Rent.

Portfolio Lines of Credit

The portfolio lines of the credit program are for investors who have at least 7 rent-producing investment units. It does not need to be 7 separate properties but rather 7 individual rent-producing units.

Ready to unlock your next investment? Call Gustan Cho Associates at 800-900-8569 or apply online for your property loan today.

The minimum loan amount is $700,000 and investors can purchase a combination of properties with this program. If investors cannot meet the minimum loan requirement of $700,000, they can either purchase two or more investment properties or do a purchase and/or refinance or a combination of the two to meet the minimum loan requirement.

7 Unit Guidelines to Qualify on Blanket Line of Credit

Here is an example of the 7 units:

• 7 single-family homes
• 4 duplexes
• 2 four-unit buildings

No-Doc Loans For Rental Properties

The above examples show at least 7 or more rent-producing units. This program allows investors a blanket line of credit that they can use anytime for any purpose they need. It can be used to purchase an investment property or to do rehab on their rental properties or for any personal reasons. There is no other investment loan program like this today. Investors do need at least 7 rental-producing properties with equity in order to qualify. Portfolio loans and lines of credit are for purchase and refinances or a combination of both. Investment homes do not have to be in the same state and can be located in multiple states.

What Is a Good DSCR Loan For Rental Properties?

The following are the types of investment properties that are eligible for the portfolio loan and blanket line of credit program:

• Single-family homes
• Townhomes
• Condominiums
• Non-Warrantable Condominiums are allowed
• Two to four-unit buildings
• 5 to 20-unit apartment buildings
• The minimum per unit property value is $50,000 and the minimum portfolio loan and/or line of credit amount is $700,000
• The maximum Loan To Value is 75% LTV
• The minimum DSCR is 1.15x which is calculated by taking the NOI divided by the PI
• At least 90% of the units need to be occupied and rented
• The borrower needs to be under the name of an LLC of the borrower
• Although the borrower’s personal debt to income ratio is not required, the minimum credit score of the borrower needs to be at least 660 FICO.
• Down Payment Requirements for purchase or loan to value for refinances depend on the borrower’s credit scores

Borrowers need at least 660 for 70% LTV, 680 for 75% LTV, and at least 700 for 80% LTV.

What Kind of Loan Do You Get For an Investment Property?

Investors who are ready to get into the real estate market, whether new or seasoned, can now qualify for this special investment property mortgage program. To learn more about it, contact Gustan Cho Associates at 800-900-8569 or text for a faster response. Or email us at alex@gustancho.com.

The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays to take your mortgage inquiry.

Gustan Cho Associates is a mortgage company licensed in multiple states with no lender overlays on government and conventional loans. We also have a lending network of 280 wholesale investors and financial institutions. We also are experts in non-QM and alternative financing loan programs. The team at Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays.