DSCR loan rates are not posted on a rate sheet the way conventional mortgage rates are. They are calculated deal-by-deal based on a combination of property characteristics, borrower credit profile, loan structure, and lender-specific pricing matrices. Rates vary by program, credit, leverage, DSCR and loan size, so it helps to understand what drives DSCR rates and how to optimize each factor.
The Five Factors That Drive Your DSCR Rate
DSCR loan pricing is driven by five primary variables, in order of impact:
- 1. Credit score — The single largest rate driver. If your score is borderline, improving it before applying is the highest-leverage rate reduction available.
- 2. Loan-to-Value (LTV) — Lower LTV = lower rate. A 65% LTV loan carries significantly better pricing than an 80% LTV loan. If you can put additional capital into the down payment, the rate improvement may be worth it.
- 3. DSCR ratio — Higher DSCR = lower rate. A property with a 1.35 DSCR gets better pricing than one at 1.05. If your market supports higher rents, locking in a good lease before applying can improve your DSCR and rate simultaneously.
- 4. Loan structure — 30-year fixed rates are priced differently than ARMs and interest-only. 5/1 and 7/1 ARMs typically start lower but carry rate-reset risk. Interest-only adds a premium but reduces payment during the IO period.
- 5. Property type — Single-family gets the best pricing. 2–4 unit adds a small premium. Short-term rentals add a premium. Mixed-use and non-traditional properties add more.
DSCR Rates vs Conventional Investment Property Rates
The common assumption is that conventional rates are always lower than DSCR rates. This is true in theory but often misleading in practice, once Fannie Mae Loan Level Price Adjustments (LLPAs) are applied to investment properties:
- When you factor in the documentation burden, 60-day timelines, and 10-property limit of conventional loans, many investors find DSCR more practical even when it is slightly higher rate
How to Get the Best DSCR Rate on Your Deal
Actionable steps to optimize your DSCR loan pricing:
- Pull credit early — Know your score before shopping. If you are below 700, a 60-day credit optimization effort can move you into a better pricing tier.
- Maximize DSCR — If the property is vacant or under-rented, lease it at market rate before applying. Every 0.1 improvement in DSCR can improve pricing.
- Put more down if the math works — Going from 80% to 70% LTV often improves rate enough to justify the additional capital commitment.
- Shop multiple lenders — DSCR pricing matrices vary significantly by lender. Viador Partners accesses multiple non-QM lenders and shops each deal to find the best rate for the specific property and borrower profile.
- Consider ARM structures — If you plan to refinance or sell within 5–7 years, a 5/1 or 7/1 ARM may offer a lower initial rate with manageable reset risk.
Frequently Asked Questions
DSCR loan rates are not posted on a rate sheet. Rates vary by program, credit, leverage, DSCR and loan size, and property type and loan structure also affect pricing.
Generally yes, once conventional Loan Level Price Adjustments are applied to investment properties. The gap is smaller than many investors expect, and the trade-off for no income documentation, no portfolio limits, and LLC vesting often makes DSCR the better choice.
Yes. Reducing LTV from 80% to 70% or 65% typically improves pricing; how much depends on the lender. Run the math on whether the additional capital deployment is worth the rate improvement.
Significantly. Credit score is the largest single driver of DSCR rate pricing. If your score is below 700, improving it before applying is worth the wait.
Yes. DSCR loan rates are market-driven and change based on the same treasury and bond market movements that drive conventional rates. Lock in your rate as soon as you have a clear timeline for closing.
Yes. Viador Partners is a broker with access to multiple non-QM and DSCR lenders. Each deal is shopped across lenders to find the best combination of rate, terms, and certainty of close for the specific property and borrower profile.