DSCR Loan Pre-Approval Checklist 2025: Win More Deals, Close Faster

My Personal Blueprint for Getting Fast DSCR Loan Pre-Approvals: How to Get Approved for a DSCR Loan in 2025

As regular readers know, I’ve built a portfolio of over 120 rental properties in the USA, and I’ve used DSCR loans to purchase and/or refinance all of my properties. As a real estate investor, you know that speed and certainty are everything. Having a solid pre-approval for your DSCR loan in hand can be the difference between winning a great deal and watching it go to another buyer.

In this guide, I’ll walk you through my simple, no-jargon checklist that will help you get pre-approved for a DSCR loan quickly (and on the best possible terms). Consider this your blueprint for DSCR success.

What is a DSCR Pre-Approval and Why is it Essential?

As an investor, you’ve likely heard of a pre-qualification or pre-approval. In the DSCR lending world, a pre-approval is a conditional commitment from a lender to give you a loan based on a review of property and personal details. Having a pre-approval means a lender has already pulled your credit report and reviewed your key documentation, and you’re pretty much good to go.

In a competitive real estate market, having a pre-approval in-hand tells a seller you are a serious, qualified buyer, and it gives you a huge advantage over buyers who are only pre-qualified. It also gives you a clear understanding of your borrowing power, and the DSCR interest rates you will get, so you can confidently make offers on properties you know you can finance, and you know will cash flow.

My Ultimate DSCR Pre-Approval Checklist

Getting pre-approved for a DSCR loan is not as complicated as you might think. I’ve got about $3.2 million in DSCR loans funding my own rental property portfolio. If I can do, it really can’t be that difficult! The key is to be prepared. By gathering all your documents and information in advance, you can make the process quick and painless. DSCR lenders love clear, organized paperwork! Here is a simple checklist to help you get started on the right foot.

Note: Id you’re looking for a DSCR cash out refinance loan, there are different criteria to consider. I recommend reading my guide: DSCR cash out refinance.

1. Documents and Information about the Property

Unlike a conventional loan, a DSCR loan is approved primarily based on the property’s rental income. You will need to provide the following documents for the property you are planning to purchase, or for a hypothetical property if you haven’t found one yet.

• Projected or Current Rental Income: The most important factor for a DSCR loan. The lender needs to know the property’s rental income. This can be estimated using a professional rent analysis, which is often done by the appraiser. If you have a current lease and rent roll from the property management software – or bank accounts showing rent deposits – all the better.

• Property Tax Information: The lender will need to know the property’s annual tax amount to accurately calculate the PITI portion of your loan.

• Insurance Information: The lender will need an estimate of the property insurance cost. This is usually a quick phone call to your insurance agent, or an online quote.

• HOA/Condo Fees: If the property is part of a homeowners’ association or a condo, the lender will need to know the monthly fees to include them in the PITI calculation.

If you need help calculating the DSCR ratio for a rental property, you can use my free DSCR Loan Calculators.

2. Your Personal Financial Information

While the DSCR loan focuses on the property, lenders still need to assess your financial health. You don’t have to provide tax returns or W-2s, but you will need to provide the following:

• Proof of Liquidity/Reserves: Lenders will require you to show you have enough cash reserves to cover the down payment, closing costs, and a certain number of months (typically 3-12) of loan payments, even if the property is vacant. You can use bank statements, investment account statements, or retirement account statements.

• Credit Report: The lender will pull your credit report to check your credit score and history. A higher credit score can lead to a lower interest rate and better terms. For non-US residents (like me), U.S. credit is not required.

• Real Estate Investment Experience: While not a hard requirement, some lenders may ask about your past investment experience, especially if you are a new investor. Investors with more experience van often get a better interest rate and terms. Be prepared to provide a list of properties you own with as much details as possible. A spreadsheet format is fine.

WARNING: Be careful when you’re sending sensitive personal information to third parties. The real estate world is full of new, inexperienced investors, and people who are super excited to get their deals funded. That’s the ultimate fertile ground for scammers. To stay safe, check out my article on DSCR scams and Red Flags.

How to Use Your DSCR Pre-Approval to Win Deals

Once you have your pre-approval letter in hand, you’re ready to go an make an offer. Here’s how to use it to win more deals:

• Make Your Offer Stronger: A DSCR pre-approval shows sellers you are a serious, qualified buyer. In a competitive market, sellers often receive multiple offers. A pre-approved offer is often given more weight and consideration because the buyer knows you have funding in place. This can be the deciding factor when a seller is choosing between two similar offers. I know for a fact that I’ve won deals simply because I had a pre-approval in hand.

• Negotiate Better Terms: A pre-approval letter can give you leverage. In real estate, you can bring 2 things to the table as a buyer: time and money. A pre approval demonstrates that you’re ready to close, which can lead to better negotiation opportunities. For example, you may be able to negotiate a shorter closing period or a more favorable price, or a seller concession to cover your closing costs because the seller knows the financing is likely to go through without a hitch.

• Act Quickly and Confidently: With a pre-approval, you can move faster when a great deal comes along. When you find a property, you can submit your offer immediately, knowing you have the financing lined up. This speed can be a major advantage, especially in a fast-paced market, or if you’re bidding on a property that other investor want to steal from under you.

You can review all of the numbers for an actual deal we got pre-approved and funded with a DSCR loan for one of my clients in my DSCR loan case study.

Common Reasons for DSCR Pre-Approval Denial

Even with a strong DSCR, there are a few common pitfalls that can lead to your application getting declined. Knowing these can help you avoid them and ensure a smooth process. You can’t change your history, but you can learn to avoid the most common mistakes so that your next application is successful.

• Low DSCR: This might seem obvious, but a lender wants to see a DSCR of at least 1.0, and most prefer 1.2 or higher. A low DSCR means the property’s rental income doesn’t cover the loan payments. If this is the case, you may need to find a property with a higher potential rent or a lower purchase price. If the property is borderline, you can read my article on how to improve a property’s DSCR.

• Insufficient Cash Reserves: Lenders want to see that you have enough liquidity to cover the down payment, closing costs, and a few months of payments in case the property is vacant. If you don’t have enough reserves, the lender may deny your application.

• Low Credit Score: While DSCR loans are asset-based, your personal credit score is still an important factor. A lower score can indicate a history of poor financial management, and might not meet the lender’s criteria. A higher credit score will often get you a better interest rate and more favorable terms. For non-US residents like me and most of my clients, a US credit score isn’t required, but we pay a higher interest rate.

• Property Condition or Type: Some lenders have specific requirements for the property type and condition. If the property has significant damage or is a niche type (e.g., a manufactured home or a unique commercial property), some lenders may be unwilling to finance it. I see this a lot when people are trying to buy fixer uppers with a DSCR loan. It’s not the right tool for the job! It’s better to use hard or private money to purchase and renovated, then refinance with a DSCR loan later.

• Loan Size: Minimum loan size varies between lenders. You can get DSCR loans as small as $75,000, but most lenders want a minimum loan size of $100,000. I get a lot of enquiries from people looking to buy cheap investment properties with DSCR loans. In my experience, buying cheap is not a good idea if your goal is to build long-term wealth with real estate.

When to Get Your DSCR Pre-Approval

Timing can be really important in real estate investing. Being able to act fast when a good property comes along is critical. The best time to get pre-approved for a mortgage is usually before you start actively searching for a property. With DSCR lending, the lender will need specific property details to get you pre-approved, so you’ll need to find a subject property first.

You should also get pre-approved if you’re planning a refinance in the near future. Having your financing lined up allows you to act quickly when interest rates drop or when your current loan is about to mature.

Here are a few key situations where early pre-approval can help you avoid missing out on opportunities:

• Before making offers: Decide on your loan structure (fixed rate vs ARM), and get a pre-approval letter. That signals to sellers that you’re a serious buyer, which can make your offer stand out in competitive markets.

• When rates are trending down: The interest rate cycle is far more dynamic and volatile than people think. Interest rates change every single day, so getting pre-approved lets you lock in favorable terms quickly before rates rise again.

• Ahead of a refinance: If you have balloon payments or adjustable-rate loans coming due, pre-approval ensures you’re ready to refinance without delays.

How Long Do DSCR Pre-Approvals Last

Most DSCR loan pre-approvals are valid for 60–90 days, depending on the lender and program. Your pre-approval letter will state the exact expiry date, so make sure you check it. If market conditions (interest rates) or your file change (credit score, cash reserves etc.), the lender may want to adjust the terms of the pre-approval.

What’s Needed for Renewal of a Pre-Approval

• Updated asset proof (latest 1 to 2 months bank/investment statements for down payment, closing costs, and reserves)
• Credit refresh
• Current rent estimate / 1007 Appraisal (or lease/rent roll)
• Refreshed PITI inputs (tax & insurance quotes; HOA if applicable)
• Any updated entity/KYC docs (LLC articles, operating agreement, ID)

💡Pro Tip: Set a reminder to renew at day 45 so you keep your buying power active.

How to Choose the Right DSCR Lender for Pre-Approval

The right lender or broker can save you time, money, and deals. I work with some amazing brokers that are fast, responsive and have access to 25,000+ DSCR loan products and lenders. I’ve also worked with some real bad apples that are slow to respond, disorganized, and offer worse terms. Real estate is a team sport, so pick your team wisely. Prioritize these factors when requesting pre-approval:

• Turnaround time: Ask for their typical SLA for pre-approval letters (often 24–72 hours), speed on credit refresh, and closing timelines. Fast responses win competitive offers.

• Experience with your property type: Confirm appetite for your asset (SFR, 2–4 unit, condo, STR/MTR) and borrower profile (first-time investor, non-resident/foreign national). Lender familiarity reduces last-minute underwriting friction.

• Competitive rates & pricing: Compare rate sheets, LTV caps, DSCR bands, reserve rules, fees, and prepayment penalty structures. A slightly lower rate or lighter reserves can materially improve DSCR and cash flow.

If you want to get the best current DSCR loan deals from great lenders, and details of exclusive off-market and DSCR Pre-Approved rental properties in your inbox every week. You can join my VIP Priority Investor List.

Final Thoughts: Taking Control of Your DSCR Pre-Approval

Getting pre-approved for a DSCR loan is a critical step in building a successful rental property portfolio. Whenever I’m buying rental properties, or representing my clients buying turnkey investment properties, we always go to the seller prepared with a DSCR pre approval in hand. By preparing your documents in advance, understanding the key factors lenders look for, and using your pre-approval strategically, you can gain a significant edge in a competitive market.

Frequently Asked Questions