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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.
The short answer
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
Side-by-side: DSCR vs Bank Statement Loan
| Feature | 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 |
FAQ
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.
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.
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.
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.
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.