A DSCR loan lets real estate investors qualify based on rental income instead of W-2s or tax returns. Lenders calculate the debt service coverage ratio by dividing the property's net operating income by the annual debt payments. Most lenders require a DSCR of 1.0 to 1.25, meaning the property generates enough rent to cover the mortgage. These loans are popular with investors who own multiple properties or are self-employed because personal income documentation is minimal.