Maximum DSCR Loan Amount: How Much Can You Borrow?

DSCR loans typically max out at $2-$3 million for most lenders, with some portfolio lenders extending to $5 million or higher for exceptionally qualified borrowers. Unlike conventional mortgages, DSCR loans have no standardized limit—each lender sets their own ceiling based on risk tolerance and capital availability.

Understanding how lenders determine your maximum loan amount, and what strategies can help you qualify for larger loans, is essential for scaling your investment portfolio.

Standard DSCR Loan Limits by Lender Type

Non-QM Lenders (Most Common)

Typical range: $75,000 to $2,500,000

These lenders originate loans and sell them to aggregators or securitize them into private MBS pools:

• Minimum loan: $75,000-$150,000 (below this, economics don't work)
• Sweet spot: $200,000-$1,000,000 (best pricing, most competition)
• Maximum standard: $1,500,000-$2,000,000
• High balance: $2,000,001-$2,500,000 (stricter requirements, higher rates)

Loans above $2 million through non-QM lenders are rare. When available, they require:

• DSCR ≥1.30
• Credit score 740+
• LTV ≤70%
• 12-18 months reserves
• Significant liquid assets beyond reserves

Portfolio Lenders

Typical range: $500,000 to $5,000,000+

Portfolio lenders keep loans on their books rather than selling them:

• More flexible on loan size
• Can go up to $5M-$10M for well-qualified borrowers with relationship banking
• Often require compensating balances (deposits equal to 10-20% of loan amount)
• May offer better terms if you consolidate other banking services

Trade-off: Rates are often 0.25-0.50% higher than non-QM lenders, but the flexibility on loan size and terms can be worth it.

Community Banks and Credit Unions

Typical range: $200,000 to $3,000,000

Local institutions offering DSCR-style products (though they may call them "investor cash flow loans"):

• Limits vary dramatically by institution size
• Small banks max at $1M-$2M
• Larger regionals go to $3M-$5M
• Require local properties (within their lending footprint)
• Relationship-based lending can increase limits

Private/Hard Money Lenders

Typical range: $50,000 to $2,000,000

For deals that don't fit traditional DSCR boxes:

• More focused on deal quality than borrower profile
• Lower limits than portfolio lenders but higher than non-QM minimums
• Rates typically 9-14%
• Short-term bridge financing, not 30-year fixed

What Determines Your Personal Maximum

Your individual loan capacity depends on multiple overlapping factors:

Property's Rental Income

The rental income is the primary constraint. Lenders use a formula:

Maximum loan = (Monthly rent × 12) ÷ (Interest rate ÷ 100) ÷ Required DSCR

Example:

• Monthly rent: $3,000
• Interest rate: 8%
• Required DSCR: 1.25

Annual rent = $3,000 × 12 = $36,000 Annual debt service allowed = $36,000 ÷ 1.25 = $28,800 Monthly payment allowed = $28,800 ÷ 12 = $2,400

At 8%, a $2,400 monthly payment supports approximately $327,000 loan (30-year amortization)

Add property taxes and insurance, and the supportable loan amount decreases:

If PITIA must be ≤$2,400 and taxes + insurance = $500/month, only $1,900 is available for principal and interest.

At 8%, $1,900/month supports approximately $259,000 loan

The insight: Higher rents support larger loans. A property renting for $5,000/month might support a $550,000 loan, while $3,000/month only supports $330,000.

Loan-to-Value (LTV) Limits

Even if cash flow supports a $500,000 loan, LTV restrictions might cap you lower:

Example: Property appraised at $600,000

• At 75% LTV: Max loan = $450,000
• At 80% LTV: Max loan = $480,000

If the cash flow analysis says you can borrow $500,000, but 75% LTV caps you at $450,000, the LTV constraint wins.

Strategy: Properties with higher rent-to-value ratios let you hit cash flow maximums before LTV limits become binding.

Debt Service Coverage Ratio

Lenders impose minimum DSCR requirements (typically 1.0-1.25). The higher the required DSCR, the lower your maximum loan:

Same property, $3,500/month rent:

• At 1.00 DSCR requirement: ~$380,000 max loan
• At 1.10 DSCR requirement: ~$345,000 max loan
• At 1.25 DSCR requirement: ~$304,000 max loan

Lender requirements vary:

• Most require 1.00-1.25 for standard deals
• Weak markets or challenging properties: 1.30-1.40 required
• Strong markets with high-credit borrowers: 0.90-1.00 may be acceptable

Lender's Risk-Based Capacity

Beyond posted limits, lenders have internal concentration limits:

Single loan size: Most non-QM lenders won't originate loans exceeding 2-3% of their annual volume. A lender doing $500M/year might cap individual loans at $10M-$15M.

Borrower exposure: Even if you qualify, lenders may cap total exposure to one borrower at $3M-$5M across all loans.

Geographic concentration: Lenders limit exposure to single markets. If they're overweight California properties, they might decline a perfectly good $2M California deal while funding a $2M Texas deal.

Your Liquidity and Reserves

Large DSCR loans require substantial reserves:

Reserve requirements by loan size:

• $300,000 loan: 6 months PITIA (~$12,000)
• $750,000 loan: 9 months PITIA (~$40,000)
• $1,500,000 loan: 12 months PITIA (~$95,000)
• $3,000,000 loan: 18 months PITIA (~$220,000)

If you don't have the required reserves, you can't get the loan even if cash flow supports it.

Reserves can include:

• Cash and checking accounts
• Savings and money market accounts
• Stocks, bonds, mutual funds (70% of value counts)
• Retirement accounts (60-70% of value counts)
• Other rental property reserves (usually not counted)

Total Property Portfolio

Experienced investors with existing successful rentals can often borrow more:

Portfolio strength signals:

• 5+ rental properties with strong payment history
• All current properties with DSCR >1.20
• No late payments on investment properties in 12+ months

Lenders view proven operators as lower risk and may:

• Increase loan size limits by 20-40%
• Reduce DSCR requirements to 1.00 or below
• Offer better pricing

DSCR Loan Minimums

Most lenders also impose minimums:

Common minimums:

• $75,000-$100,000 for most non-QM lenders
• $150,000-$200,000 for some portfolio lenders
• $250,000+ for high-net-worth focused lenders

Why minimums exist: Origination costs are similar whether the loan is $75,000 or $750,000. Small loans aren't profitable at standard rates.

Solutions for small loans:

• Portfolio lenders or community banks with relationship banking
• Hard money lenders (accepting higher rates)
• Conventional investment property loans (if you qualify based on income)

Jumbo DSCR Loans ($2M-$5M+)

For loans exceeding standard limits, expect stricter requirements:

Higher Credit Standards

• Minimum 720-740 credit score
• Clean credit history (no lates, collections, or judgments)
• Low debt-to-income on personal finances (even though not required for qualification)

Lower LTV Limits

• Standard DSCR: Up to 80% LTV
• Jumbo DSCR: Usually 70-75% max LTV
• You'll need larger down payments

Stronger DSCR Requirements

• Standard: 1.10-1.25 minimum
• Jumbo: 1.25-1.40 minimum
• Lenders want significant cash flow buffer on large loans

Extensive Reserves

• 12-24 months of PITIA in liquid reserves
• Often $200,000-$500,000 in total liquidity
• Lenders may require proof of assets beyond just this property

Experienced Investor Profile

• 3-5+ years of rental property ownership
• 3-5+ current investment properties
• Track record of successful property management

Relationship Banking

• Portfolio lenders often require deposit relationships
• Compensating balances: 10-20% of loan amount in deposits
• Consolidated banking services (business accounts, other loans)

Strategies to Maximize Your DSCR Loan Amount

Optimize Rental Income Documentation

Higher documented rent = larger supportable loan.

Appraisal rent schedule: Appraisers analyze 3-6 comparable rentals. If your property is nicer or has features comps lack, document it:

• Recent upgrades (kitchen, baths, flooring)
• Additional amenities (garage, yard, extra bedroom)
• Superior location (better school district, closer to employment centers)

Provide comp evidence: Give your appraiser rental listings showing similar properties renting for top-of-market rates. Don't rely on the appraiser finding the best comps—be proactive.

Executed leases: If the property is already rented, an executed lease at market or above-market rent is powerful evidence. Appraisers can use actual rent if supported by market comps.

Improve the Property's DSCR

Even small improvements can unlock larger loans:

Scenario: Property rents for $2,800/month, supports $350,000 loan at 1.25 DSCR.

Invest $12,000 in upgrades (new flooring, paint, modern fixtures) and increase rent to $3,100/month. Now the property supports a $390,000 loan—$40,000 more borrowing capacity.

The $12,000 investment unlocked $40,000 in loan capacity. If you're buying, this might mean paying $40,000 less out of pocket.

Increase Your Down Payment to Hit Cash Flow Targets

If LTV limits aren't constraining you but cash flow is:

Example: Property needs $2,200/month PITIA to hit 1.25 DSCR on $2,750/month rent.

At 75% LTV ($450,000 loan on $600,000 property), PITIA is $2,650/month. DSCR = 1.04. Doesn't qualify.

At 70% LTV ($420,000 loan), PITIA is $2,450/month. DSCR = 1.12. Still short.

At 65% LTV ($390,000 loan), PITIA is $2,250/month. DSCR = 1.22. Approved.

You needed an extra $60,000 down payment to make the deal work. If the property is a great long-term hold, it might be worth it.

Leverage Portfolio Relationships

If you have multiple properties, consolidate with one lender:

Benefits of portfolio relationships:

• Higher individual loan limits
• Better pricing (0.25-0.50% rate reductions)
• Streamlined underwriting on subsequent purchases
• Potential for blanket refinances

Building the relationship: Start with one or two properties, prove yourself as a reliable borrower, then approach them for larger deals.

Consider Multiple Loans

If one lender won't go above $2M but you need $3M, use two lenders:

Structure:

• Primary lender: $2M first mortgage at 8.0%
• Secondary lender: $1M second mortgage at 10.5%

Blended cost: $2M at 8% + $1M at 10.5% = 8.83% weighted average rate

This costs more than a single $3M loan at 8.5%, but it's an option when single-lender limits constrain you.

Risk: Second mortgages are junior to first mortgages. If you default, the second lender is only paid after the first is made whole. This risk is why second mortgage rates are substantially higher.

Use Seller Financing for the Gap

In situations where DSCR lenders won't go high enough:

Example: $1.5M property, lender will only do $1.05M (70% LTV).

You have $300,000 cash but need $1.5M total.

Solution: Seller carries $150,000 second mortgage at 7% interest-only for 5 years.

Structure:

• First mortgage: $1.05M DSCR loan
• Second mortgage: $150,000 seller financing
• Your down payment: $300,000

This requires a motivated seller, but it can bridge the gap when institutional financing falls short.

Join with a Co-Borrower

Adding a co-borrower with strong credit and reserves can increase loan capacity:

Benefits:

• Combined reserves (both borrowers' assets count)
• Better credit profile if co-borrower has 760+ score
• More favorable lender view of the deal

Drawbacks:

• Profit sharing with co-borrower
• Shared liability on the loan
• Potential relationship complications

Co-borrowing works best with experienced partners you trust—spouse, family member, or business partner with aligned investment goals.

Red Flags on Maximum Loan Amounts

Stretching to Maximum LTV and Minimum DSCR

A property at 80% LTV and 1.00 DSCR leaves zero margin for error:

• One month vacancy = negative cash flow
• Small rent decrease = underwater on debt service
• Property tax increase = DSCR below 1.0

Better approach: Target 75% LTV and 1.15+ DSCR. The reduced leverage costs less than the risk of cash flow problems.

Lenders Pushing You to Inflate Rent Projections

If a lender suggests "appraiser will probably come in at $X rent" to make your numbers work, that's a red flag.

Inflated rent projections lead to:

• Difficulty renting at expected rates
• Negative cash flow from day one
• Potential for default

Always use conservative rent estimates based on actual comps, not optimistic projections.

Loan Amounts Requiring Perfect Execution

If your maximum loan requires:

• 100% occupancy
• Zero maintenance
• No property tax increases
• No insurance increases

You're overleveraged. Build cushion into your projections.

Bottom Line

Most investors can access DSCR loans from $150,000 to $2,000,000 through non-QM lenders. Portfolio lenders extend capacity to $3M-$5M for well-qualified borrowers with strong relationships.

Your personal maximum depends primarily on the property's rental income and the lender's required DSCR. Secondary factors include LTV limits, your reserves, credit score, and experience level.

To maximize loan capacity:

1. Document strong rental income with solid comps
2. Improve property features to justify higher rents
3. Build portfolio relationships for higher limits
4. Consider strategic partnerships when deals exceed single-lender capacity

But remember: maximum loan capacity isn't the same as optimal leverage. Conservative borrowing with healthy DSCR cushions and meaningful equity stakes creates sustainable, profitable rental portfolios. Maximize your loan size only when the deal fundamentals support it, not simply because you can.