Loan Comparison
DSCR vs Bank Statement Loan
Both are TQL non-QM programs. DSCR qualifies the property; bank statement qualifies the borrower. The right one depends on what you’re buying and how you make money.
Side-by-side: DSCR vs Bank Statement
| Factor | DSCR Loan | Bank Statement Loan |
|---|---|---|
| Built for | Real estate investors qualifying on rental income | Self-employed borrowers qualifying on personal cash flow |
| Occupancy | Investment / non-owner-occupied only | Primary residence, second home, or investment |
| Income documentation | None — the property's rental income qualifies | 12 or 24 months of personal or business bank statements |
| How income is calculated | Property's projected rent ÷ PITIA (DSCR ratio) | Deposits averaged; expense ratio applied on business path |
| Maximum LTV | Up to 80% (investment) | Up to 90% (primary, 720 FICO, ≤$1.5M) |
| Minimum credit score | 640 | 620 |
| Loan amount range | $100K - $3.5M | $150K - $4M |
| DTI limit | Not measured — DSCR ratio replaces DTI | Up to 55% on primary (with compensating factors) |
| LLC vesting | Allowed | Restricted (personal name typically required on primary) |
| Short-term rental (Airbnb) income | Counts up to 80% LTV | Not applicable — qualifies on personal income, not property income |
| Closing timeline | 15-21 days | 21-30 days |
| Foreign national borrowers | Eligible via FN DSCR program | Limited eligibility — case-by-case |
Choose DSCR if…
- You're buying or refinancing an investment property (no primary residence)
- You'd rather skip personal income docs entirely
- The property's rent comfortably covers PITIA (DSCR ≥ 1.00)
- You want to vest title in an LLC
- You're scaling a portfolio and need unlimited financed properties
- You're a foreign national or visa holder using investment property to qualify
Choose Bank Statement if…
- You're buying a primary residence or second home (not investment-only)
- You're self-employed with strong bank deposits but heavy tax write-offs
- You want to qualify on personal cash flow rather than rental income
- The property is owner-occupied and DSCR isn't an option
- You have 12+ months of consistent business or personal deposits to document
- You need a non-QM path but want full-doc-style underwriting on income
DSCR vs bank statement — FAQs
Can I use a DSCR loan on a primary residence?
No. DSCR loans are investment / non-owner-occupied only. They qualify on the property's rental income — which only works when the property is rented out. For a primary residence, you'll need a different income-documentation path: bank statement, P&L, 1099, asset utilization, or full-doc conventional.
Can I use a bank statement loan to buy an investment property?
Yes — TQL's Prime Time bank statement program supports investment properties. However, if the property is purely a rental, DSCR is usually the cheaper, faster path because it qualifies on the property's rent and doesn't require any personal income docs. We quote both when both fit.
Which loan has a lower rate — DSCR or bank statement?
Bank statement typically prices slightly below DSCR for the same FICO/LTV combination. DSCR carries a higher premium because it skips personal income docs entirely. That said, for a self-employed investor whose bank statements show write-offs muddying the picture, DSCR's no-income-docs underwriting often makes the deal qualify when bank statement won't.
If I'm self-employed and buying a rental, which should I pick?
Usually DSCR. It skips your tax-return mess entirely and qualifies on the property's rent. Pick bank statement only if the property doesn't cash flow well enough for DSCR — i.e., the projected rent is below 1.00x the PITIA. In that case you fall back to qualifying on your personal income.
Can I use both in the same year?
Absolutely. Many TQL clients use bank statement for a primary residence and DSCR for their rental portfolio. They're complementary, not competing — different products for different borrower scenarios within the same household.
Both programs, one lender, one call.
TQL writes DSCR and Prime Time bank statement loans in-house. Tell us about the borrower and the property — we’ll quote the program that fits.