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When it comes to building wealth through real estate, financing can either fuel your portfolio or limit your potential. For many investors, traditional loan products fall short—especially when your income isn’t W-2 based or you’re already carrying multiple properties. That’s where DSCR home loans come in.
Debt Service Coverage Ratio (DSCR) loans provide a powerful alternative to conventional lending, allowing borrowers to qualify based on a property’s cash flow instead of personal income. At Miranda Mortgage in Denver, we specialize in helping real estate investors take advantage of DSCR financing with clarity, flexibility, and strategy.
DSCR stands for Debt Service Coverage Ratio, a metric used to evaluate whether a property generates enough rental income to cover its expenses. Specifically, the DSCR is calculated as:
Gross Rental Income ÷ PITIA (Principal, Interest, Taxes, Insurance, and Association Fees)
If the result is 1.0 or higher, it typically indicates that the property can support itself financially. Many DSCR lenders require a ratio of at least 1.0 to 1.25, depending on the property type, location, and risk profile.
Unlike conventional mortgages that rely on your personal income and employment history, DSCR loans shift the focus to the performance of the investment property itself.
DSCR loans are an ideal solution for:
They’re especially useful when your debt-to-income ratio makes it tough to qualify for conventional loans, or when you want to bypass extensive income documentation.
Choosing a DSCR loan opens up unique opportunities, especially in competitive markets like Denver:
Miranda Mortgage has access to a wide network of DSCR lenders, enabling us to match you with the right program based on your property, strategy, and long-term goals.
At Miranda Mortgage, we offer three core DSCR loan structures:
Each structure is designed to align with your investment timeline, whether you’re holding long-term or planning to refinance after a few years.
DSCR loans often include a prepayment penalty, typically ranging from 0 to 5 years. This fee applies if you sell or refinance during the penalty period. While this might sound restrictive, it actually provides room to negotiate better rates.
The longer you’re willing to commit to the loan, the better your pricing. However, the prepayment structure can be tailored to your needs—such as a 2- or 3-year hold—with a slightly higher rate or points.
This flexibility is key when planning your exit strategy or short-term investment projects. During your consultation, we’ll discuss the best configuration for your goals.
Here’s how DSCR loans stack up against traditional financing:
If you’re considering refinancing, you can use our mortgage calculator to get projections.
Unlike conventional lending with rigid Fannie Mae and Freddie Mac guidelines, DSCR loan products are offered by a wide variety of private lenders—each with their own rules.
This can cause confusion: one lender might allow short-term rental income, while another might not. Some allow 15% down, others require 25%. That’s why working with a broker like Miranda Mortgage is essential—we navigate the differences for you.
Whether you’re financing a fix & flip property or buying a multi-unit investment, we’ll help you find the DSCR lender that fits your exact scenario.
Navigating the DSCR landscape on your own can be overwhelming. When you go straight to a direct lender, you’re limited to that one lender’s guidelines. But by partnering with Miranda Mortgage, you gain access to a network of DSCR programs and the expert guidance to structure your deal correctly.
As a Denver-based team with national reach, we help you:
You can see all our loan programs here. We’re not just here to quote rates. We’re here to get your loan closed—and done right.
While DSCR loans are a fantastic tool for many investors, they’re not the best fit for every scenario. For instance, they aren’t suited for primary residences or borrowers with little to no down payment. But if you’re building wealth through real estate and have solid cash-flowing assets, DSCR may be your best option.
Take the first step by scheduling a consultation with our team. We’ll review your goals, analyze your property’s income potential, and determine whether DSCR—or another investment property loan—is the right path.
Miranda Mortgage is here to simplify your path to property ownership and portfolio growth. Whether you’re buying your first rental or your tenth, we’ll match you with the lender and product that fits.
Call 303.520.1786 or email Naiely@BarrettFinancial.com to explore more financing options for Denver-area investors.
