No Ratio DSCR Loans for Negative Cash Flow Properties
No Ratio DSCR Loans for Negative Cash Flow Properties
Financing a rental that doesn’t cash flow can still make sense if the deal is strong for appreciation, repositioning, or future rent growth. A No Ratio DSCR loan is built for that kind of investor strategy.
- Call or text: (302) 703-0727
- Schedule a 30-minute strategy call: https://schedule.johnthomasteam.com/30min
- Apply online: http://www.PRMILoanApplication.com
Fast review tip: Send the property address, estimated rent, and your credit score range. I’ll tell you if No Ratio DSCR is a fit.
No Ratio DSCR Loans for Negative Cash Flow Investment Properties
Direct answer: A No Ratio DSCR loan allows real estate investors to finance rental properties without proving income or meeting a minimum debt service coverage ratio.
Even if the property shows negative cash flow, investors can qualify based primarily on credit score, down payment, assets and property value.
Loan Officer John Thomas offers No Ratio DSCR loans up to 80% LTV on purchases and 70% LTV on cash-out refinances with a 660 minimum FICO up to $3,000,000.
If you’re a real estate investor, you already know this:
Not every great deal shows positive cash flow on paper.
- Some properties are appreciation plays.
- Some are short-term reposition projects.
- Some are in high-growth markets where rents haven’t caught up yet.
Traditional DSCR loans require the property to meet a minimum rent-to-payment ratio of Typically 1.0 or higher.
A No Ratio DSCR loan removes that requirement.
And that changes everything for experienced investors.
What Is a No Ratio DSCR Loan?
A standard DSCR (Debt Service Coverage Ratio) loan requires rental income to cover the mortgage payment — usually at a 1.00 to 1.25 ratio.
A No Ratio DSCR loan:
- Does not require rental income to meet a ratio
- Does not require income documentation
- Does not calculate personal debt-to-income
Approval is based soley on:
- Credit score
- Down payment
- Property value
- Investor experience
- Assets
This is a Non-QM (non-qualified mortgage) investor loan designed for flexibility.
What are the Guidelines for a DSCR No Ratio Loan?
Below is summary of the Guidelines to qualify for a No Ratio Loan to purchase or refinance an investment property.
- No income documentation required – no tax returns, W2s, pay stubs, or personal DTI calculations
- No rental income requirement – property doesn’t need to show positive cash flow or meet a DSCR threshold.
- Up to 80% LTV on purchases
- Up to 70% LTV on Cash-Out Refinances
- Minimum 660 Credit Score Required
- Available for US Citizens, Permanent Residents and some Non-Permanent Residents
- Available for ITIN Borrowers & DACA Borrowers
- No Investor Experience Required
- Property May be Vacant on a Purchase Transaction
- Seller Assistance up to 6.0%
- Can Close in the name of an LLC
- Max Loan Amount is $3,000,000
- Minimum Loan Amount is $100,000
What are the Eligible Property Types DSCR Loan?
The No Ratio DSCR Loan can be used to purchase any of the following property types with a negative or no ratio:
- Single Family Residence (SFR)
- Town Homes
- PUD
- 2-4 Unit Properties
- Warrantable Condos & Non-Warrantable Condos
Can You Finance a Negative Cash Flow Property?
Yes.
With a No Ratio DSCR loan, the property does not need to:
- Show positive cash flow
- Meet a DSCR threshold
- Provide lease income to qualify
This allows investors to purchase or refinance properties where:
- Rents are temporarily below market
- Property is being improved
- Appreciation potential outweighs short-term cash flow
- Market rents are rising rapidly
That flexibility is why experienced investors use this as a portfolio growth tool.
Key Benefits of John Thomas’ No Ratio DSCR Loan Program
Here’s exactly how this program works:
No Income Documentation Required
No:
- Tax returns
- W2s
- Pay stubs
- Personal DTI calculations
Your personal income is not the qualifying factor.
No Rental Income Requirement
The property does not need to hit a DSCR ratio. Negative cash flow is allowed.
Simplified Qualification
Approval is based primarily on:
- Credit score
- Down payment
- Property value
Investor-Friendly Structure
Ideal for investors with:
- Multiple properties
- Complex tax returns
- Large write-offs
- Business income
Portfolio Expansion Tool
Because you bypass income and rental restrictions, you can:
- Scale faster
- Refinance strategically
- Acquire appreciation-based assets
Leverage Guidelines
- Up to 80% LTV on purchases
- Up to 70% LTV on cash-out refinances
- Minimum 660 FICO required
Who Is This Loan Best For?
This program works best for:
- Seasoned real estate investors
- Investors scaling portfolios quickly
- Buyers in high-appreciation markets
- Investors with strong credit and liquidity
- Property owners who cannot qualify with traditional DTI rules
It is not ideal for:
- Low credit borrowers
- First-time investors without reserves
- Owner-occupied properties
This is strictly an investment property loan only.
Credit, Down Payment, and Qualification Requirements
Minimum Credit Score
660 FICO minimum. Higher credit = better pricing.
Down Payment
20% down for purchases (80% LTV max).
Cash-Out Refinance
Up to 70% LTV.
Income Documentation
None required.
- No tax returns.
- No W2s.
- No pay stubs.
Debt-to-Income Ratio
Not calculated.
How This Differs from a Standard DSCR Loan
| Feature | Standard DSCR | No Ratio DSCR |
|---|---|---|
| Rental income required | Yes | No |
| DSCR ratio required | Yes | No |
| Income docs | No | No |
| Negative cash flow allowed | Usually no | Yes |
| DTI calculated | No | No |
If your property doesn’t meet DSCR guidelines, this is often the solution.
Real Investor Example
An investor finds a property in a fast-growing area.
- Purchase price: $500,000
- Projected rent: $2,800
- PITI payment: $3,100
Traditional DSCR? Declined.
No Ratio DSCR?
Approved with:
- 720 FICO
- 20% down
- Strong liquidity
The investor holds for appreciation and rent growth. The property would be positive cash flow based on 3% yearly rent increase in 4 years in this scenario:
Starting rent: $2,800
Annual increase: 3% every 12 months
Year-by-year:
-
After 12 months: $2,800 × 1.03 = $2,884
-
After 24 months: $2,884 × 1.03 = $2,970.52
-
After 36 months: $2,970.52 × 1.03 = $3,059.64
-
After 48 months: $3,059.64 × 1.03 = $3,151.43
So it would take 4 years (48 months) for the rent to reach (and pass) $3,100 with 3% annual increases.
Common Myths About No Ratio DSCR Loans
“Negative cash flow means automatic denial.”
Not with this program.
“No income documentation means risky underwriting.”
Approval still requires strong credit and equity.
“These are subprime loans.”
No. These are Non-QM investor loans designed for flexibility.
“Only small investors use these.”
In reality, many large portfolio investors rely on No Ratio structures to scale.
Step-by-Step: How to Qualify
- Contact DSCR Lender and apply for a pre-approval
- Credit Check and confirm meet minimum 700 Credit score Requirement
- Provide Asset Statements to source funds for down payment, closing costs & reserves
- Confirm 20% down payment is available
- Submit property details to confirm meets eligible property type
- Appraisal Order to determine value and market rent
- Title Search Ordered
- Underwriting reviews credit, appraisal, title, assets and market rent for approval
- If closing in LLC, LLC formed and LLC docs reviewed by Lender
- Clear any remaining conditions and schedule closing
The process is streamlined compared to traditional income-based loans.
Why Investors Work with Loan Officer John Thomas
John Thomas is a national Non-QM loan expert who understands investor strategy. John is also an active real estate investor himself who has invested in single family properties for fix & flip, long term rentals, short term rentals, commercial properties and commercial development.
He doesn’t just originate loans, he is an active investor who understands how to structure deals and can advise not only on the finance options but real estate investment strategies.
He helps investors:
- Structure financing for long-term growth or short term income
- Choose the right leverage strategy
- Navigate Non-QM guidelines
- Avoid underwriting surprises
When you’re scaling a real estate investment portfolio, details matter.
How Do You Apply for a No Ratio DSCR Loan?
If you want to buy or refinance an investment property using a No Ratio DSCR loan, the first step is a quick strategy call with John Thomas or his team. We’ll review the property, your credit profile, your down payment (or equity), and the best structure for your investment goals.
- Call or text: (302) 703-0727
- Schedule a 30-minute appointment: Book a time here
- Apply online: Start your application here
John Thomas | DSCR & Non-QM Loan Expert
John R. Thomas (NMLS #38783)
Loan Officer, Primary Residential Mortgage, Inc. (PRMI)
If you’re comparing DSCR options, I’ll help you understand what the lender will look at and how to structure the loan based on the property and your investment plan.
Contact: (302) 703-0727
Schedule: https://schedule.johnthomasteam.com/30min
Online Application: http://www.PRMILoanApplication.com
Frequently Asked Questions
What is a No Ratio DSCR loan?
A No Ratio DSCR loan is a Non-QM investor loan that does not require rental income to meet a debt service coverage ratio.
Can I qualify if the property has negative cash flow?
Yes. This program allows financing even if rent does not cover the mortgage payment.
What credit score is required?
Minimum 660 FICO.
How much can I borrow?
Up to 80% LTV on purchases and 70% LTV on cash-out refinances.
Do I need to provide tax returns?
No. No income documentation is required.
Is this for owner-occupied homes?
No. This is for investment properties only.
Is DTI calculated?
No personal debt-to-income ratio is calculated.
Who is this loan best for?
Experienced investors who want to scale without income verification limitations.
