Max Slyusarchuk, CEO of AD Mortgagesaid the greater availability of DSCR products is associated with higher secondary market adoption.
“The comfort of DSCR does not come from the lenders, but from the ultimate bond buyers and investors,” he said. “Lenders can produce what the market wants to buy.”
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Slyusarchuk added that two reasons contributed to the comfort in the secondary market. The first is that DSCR loans are easier to underwrite, and second, there are accurate calculations for the underlying loan-to-value ratios.
“I think the rebound in 2025 came from realizing that there are a lot of these types of loans available, and we can underwrite them more easily and quickly. We have the evidence to educate bond buyers about why this product is OK,” he said.
“I can tell you that DSCR is an easier loan to get. It’s a higher down payment, it requires a higher credit score, and the performance is really good. … Investors don’t have to worry about performance. And I think it will definitely continue to grow in the coming years.”
Stacy Speas, senior vice president of Operations for Cornerstone maintenanceagreed that DSCR loans perform well despite their non-traditional nature.
“To be fair, even though DSCR is not a traditional underwriting…we certainly see, in terms of delinquency, that it is not materially different from a traditional underwriting,” Speas said. “Since the revenue streams are not traditional, being able to rely on that potential rental income, as opposed to traditional W-2 income, has not been proven to be a major deterrent in terms of continued delinquencies. So for our customers and our investors, that’s good.”
Speas said as long as consumers wait for a drop in interest rates, a strong rental market will prevail. And while that sounds like bad news, there is also a positive side.
“I think it’s very difficult right now for consumers to achieve homeownership. So to the extent that there are landlords that can provide that additional rental (supply), that will continue to be a strong market,” she said.
Attractive offer
As such, lenders’ desire to get borrowers into homes means standards are changing. Jessica Vance, owner of the San Diego-based company Jessica Vance Real Estate and Mortgagesa dba from Anker Mortgage Financing Inc.said she has seen lenders offering lower DSCR ratios.
“Most lenders like to see a DSCR ratio of 1.0 or better, which means that at the given interest rate, with a 20% drop, taking into account PITI, the property will perform equally or better. That said, we now have major lenders willing to have DSCR ratios of 0.8 and no ratio,” she said.
“The no-ratio DSCR loan is relatively new, and I expect that investors will use it more and more as it becomes known that these types of DSCR loans exist.”
Jeremy Schachter, a Phoenix-based branch manager for Fairway mortgagenamed DSCR “the product of the year” because of how versatile it proved to be amid a stubborn rates environment and ongoing tenant population.
“Many investors are self-employed and have extensive deductions, which means they do not qualify for a mortgage,” Schachter said. “Even borrowers who can document income may choose to go this route because the interest rates are competitive.
“… I see this program becoming even more popular in 2026 with investors looking to grow their real estate portfolio.”
With bigger players like Rocket Pro capitalizing on the DSCR momentum, Roby Robertson of Loan Logic said 2025 served as a “test year” for the product.
As a result, he expects significant scale and volume growth in 2026 as others in the industry expand their programs and institutional investors increase their allocations.
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