A DSCR (debt service coverage ratio) cash-out refinance lets you take equity out of a rental property based on the rent it brings in, rather than your personal income or tax returns. DSCR loans are non-agency loans — they're not Fannie Mae or Freddie Mac products — so each lender sets its own terms.
How DSCR qualifying works
The lender divides the property's monthly rent by its full monthly payment — principal, interest, taxes, insurance and any HOA dues (PITIA).
Example: rent of $2,800 ÷ PITIA of $2,450 = 1.14 DSCR. A ratio of 1.0 or higher means the rent covers the payment. Many lenders price best at 1.0 to 1.25 or higher, and some will go below 1.0 at a lower LTV. Try it in the DSCR calculator.
Typical DSCR cash-out terms
These vary by lender — treat them as typical ranges, not guarantees:
- Loan-to-value: commonly up to 70%–75% on a cash-out, lower for weaker ratios or smaller loans
- Ownership: can usually close in an LLC
- Income documents: no tax returns or pay stubs; the lease and/or an appraiser's rent estimate are used instead
- Short-term rentals: many lenders accept Airbnb-style income with history or a market study
- Seasoning: each lender sets how long you need to have owned the property
Worked example
| Amount | |
|---|---|
| Appraised value | $400,000 |
| Maximum loan at 75% | $300,000 |
| Current payoff | $180,000 |
| Cash before closing costs | $120,000 |
DSCR vs. conventional investor cash-out
| Conventional investment cash-out | DSCR cash-out | |
|---|---|---|
| Max LTV | 75% (1 unit), 70% (2–4 units) | Lender-set, commonly up to 75% |
| Qualifies on | Your personal income and debt-to-income | The property's rent |
| Title in an LLC | Not at closing | Usually allowed |
| Rate | Usually lower | Usually higher |
Conventional limits come from the Fannie Mae Eligibility Matrix and Freddie Mac Guide 4203.1. If your tax returns show strong income, conventional is often cheaper. If they don't — common for self-employed investors or those with many properties — DSCR is the cleaner path. See DSCR vs. conventional.
What investors use the cash for
- A down payment on the next rental — see cash-out refinance to buy an investment property
- Renovations that raise rent
- Paying off a hard-money or bridge loan after a rehab (often called the refinance step of BRRRR)
State guides
Colorado and Florida: Colorado DSCR refinance, Florida DSCR refinance, Colorado investment property cash-out, Florida investment property cash-out.
DSCR cash-out guides for every state we serve are listed below.
DSCR cash-out refinance by state
Each state guide shows average modeled rents, payments and ratios across the markets we cover there.
- Alabama DSCR cash-out
- Alaska DSCR cash-out
- Arkansas DSCR cash-out
- Colorado DSCR cash-out
- Connecticut DSCR cash-out
- Delaware DSCR cash-out
- Florida DSCR cash-out
- Georgia DSCR cash-out
- Hawaii DSCR cash-out
- Illinois DSCR cash-out
- Indiana DSCR cash-out
- Iowa DSCR cash-out
- Kansas DSCR cash-out
- Kentucky DSCR cash-out
- Louisiana DSCR cash-out
- Maine DSCR cash-out
- Maryland DSCR cash-out
- Massachusetts DSCR cash-out
- Mississippi DSCR cash-out
- Missouri DSCR cash-out
- Montana DSCR cash-out
- Nebraska DSCR cash-out
- New Hampshire DSCR cash-out
- New Mexico DSCR cash-out
- Ohio DSCR cash-out
- Oklahoma DSCR cash-out
- Pennsylvania DSCR cash-out
- Rhode Island DSCR cash-out
- South Carolina DSCR cash-out
- Tennessee DSCR cash-out
- Texas DSCR cash-out
- Virginia DSCR cash-out
- Washington DSCR cash-out
- Washington D.C. DSCR cash-out
- West Virginia DSCR cash-out
- Wisconsin DSCR cash-out
- Wyoming DSCR cash-out
Frequently asked questions
What is a DSCR cash-out refinance?+
It's a cash-out refinance on a rental property where the lender qualifies the loan on the property's rent compared with its payment, instead of on your personal income.
How much can I cash out with a DSCR loan?+
DSCR lenders set their own limits; many allow up to 70% to 75% of the appraised value on a cash-out, with lower limits for weaker ratios.
Can I do a DSCR cash-out refinance in an LLC?+
Usually yes. Most DSCR lenders allow the loan to close in an LLC, unlike conventional loans.
Is a DSCR or conventional cash-out better for a rental?+
Conventional is usually cheaper if your tax returns support the payment, up to 75% on one unit or 70% on two to four units. DSCR is easier if they don't, or if you want the loan in an LLC.