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Loans for First-Time Investors
Your first rental has to prove it can carry itself before you have a track record as a landlord. Total Quality Lending finances first-time investors. The program that fits depends on whether you already own your home, the size of the property and how its rent compares with the payment.
- DSCR first-time exception
- 700+ credit score
- Property
- One unit, DSCR above 1.00
- You must already own
- Your primary residence
When a DSCR loan works for a first rental
A DSCR loan qualifies the property on its rental cash flow instead of your personal income. First-time investors are eligible on the standard DSCR program under a specific exception: a credit score of 700 or higher, a DSCR above 1.00, a one-unit property, at least 36 months since any covered credit event, and ownership of your primary residence.
Loans under $150,000 require at least a 1.25 DSCR. A duplex or larger building falls outside the first-time-investor exception, and the 5–8 unit and mixed-use program requires investor experience.
If you don’t own your home yet
First-time homebuyers are not eligible for the DSCR first-time-investor exception, because DSCR loans finance investment properties only. If you will live in the property, review an eligible conventional, FHA, VA or borrower-income program. With a house hack, you live in one unit of a 2–4 unit home and rent the others.
Conventional financing also accepts investment properties for borrowers who qualify with documented personal income.
What gets reviewed on a first rental
Beyond the rent, underwriting reviews your credit, the funds for the down payment, closing costs and reserves, the appraisal, insurance and title. Standard DSCR reserves are two months of payments, with more required on loans over $1.5 million.
The appraiser’s rent estimate and any lease support the rent used to qualify. Your own budget should go further: include vacancy, management and maintenance, and test a lower-rent case before you make an offer.
Prepare for a first conversation
An early review can confirm which program fits before you sign a contract.
- Whether you own your current home, and its address.
- Any bankruptcy, foreclosure or short sale in your history, and when it happened.
- The property you have in mind, or your target price range and market.
- The expected rent and who will manage the property.
- Where the down payment and reserves will come from.
Questions about loans for first-time investors
Can a first-time investor get a DSCR loan?
Yes, on a one-unit property, when you already own your primary residence, have a credit score of 700 or higher, are at least 36 months past any covered credit event and the property’s DSCR is above 1.00.
Can I use a DSCR loan to buy my first home?
No. DSCR loans finance investment properties only, and first-time homebuyers are not eligible for the first-time-investor exception. For a home you will live in, an owner-occupied program such as conventional, FHA or VA is the path.
Do I need landlord experience?
Not for the standard DSCR first-time-investor exception or the foreign national DSCR program. The 5–8 unit and mixed-use program requires at least one year of ownership and management experience in the last three years.
Related financing and resources
Financing depends on the property, occupancy, documentation, credit and applicable program guidelines. Final terms and availability require underwriting review. This information is educational and is not a commitment to lend.