For borrowers facing this challenge we can offer a Debt Service Coverage Ratio loan, or DSCR. A DSCR loan works by taking the potential rental income from the investment property being purchased and using just that income to qualify. The rental income is determined by either an existing lease on the property or the fair market rent amount determined by the appraiser on an appraisal rent schedule. Provided that the potential rent income for the subject property is sufficient to cover the total monthly housing paying (principal and interest, taxes, insurance, HOA), the borrower would meet the debt-to-income requirements per lending guidelines. Most DSCR programs required a one-to-one ratio for payment to income, however there are some programs available that allow this ratio to go down to .75. These mortgage programs are becoming more competitive thus allowing investors a bigger opportunity to diversify their portfolio. While the program will still require the borrower to document sufficient assets and the file will be underwritten very much like a traditional mortgage, but there will not be a need to document income or verify employment. Borrowers using this program will be required to at least own a primary home and, if the property has a mortgage, show a 12-month history with no late payments.