Connecticut DSCR Loans

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If you you’re looking for a DSCR rental loan in Connecticut, we have you covered.

West Forest Capital is a leading Connecticut DSCR rental loan provider, financing real estate investments up to $3 million.

What is a DSCR Rental Loan?

  • A DSCR (Debt Service Coverage Ratio) rental loan is long term real estate financing – often up to 30 years
  • Personal income and personal credit are not significant factors in the underwriting
  • The loan is based off the property value, and the income it generates
  • Fast closing, can be done within 2-3 weeks

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Property Types

Lending Parameters

Loan Size$100,000 - $3,000,000
Loan to ValueUp to 80%
Primary ResidenceNot accepted
Rental statusRented preferred but not required (can use market rents)
TermUp to 30 years
FormatFixed or Variable available
RateVaries by product, correlation with Treasury Rates
PointsTypically 2%

Counties Covered

West Forest Capital lends in the following counties in Connecticut:

  • Fairfield County
  • Hartford County
  • Litchfield County
  • Middlesex County
  • New Haven County
  • New London County
  • Tolland County
  • Windham County

Recently Funded Bridge Loans

Why Use a Connecticut DSCR Rental Loan

  1. If you own your own business. Business owners have many expenses and unpredictable income.  Your business might have significant income, but you personally might not.  Since a DSCR loan does not require personal income, it’s ideal for business owners.
  2. If you have imperfect credit. To qualify for a DSCR rental loan, the underlying customer metrics, such as FICO score, are less important than the actual asset – your rental property.  Typically, if your FICO is in the mid-600s or above, we can work with you.
  3. Fast approval process. DSCR rental loans have a much faster approval process (2-3 weeks) than traditional loans, allowing investors to secure financing quickly and take advantage of investment opportunities as they arise.
  4. Flexible Repayment Terms. DSCR rental loans come with flexible repayment terms. This can be especially beneficial for investors who have multiple rental properties and need to manage their cash flow effectively.  Examples of options are 30 year fixed rate or a 5/1 ARM (which simply means the rate is fixed for 5 years and then resets every year going forward; there are also 7/1 ARMs, and so on).
Connecticut DSCR Rental Loan
Connecticut DSCR Rental Loan

Why Choose a Connecticut DSCR Rental Loan

Investing in rental properties in Connecticut provides an opportunity to achieve the long term benefits of real estate: cashflow, future appreciation, and depreciation for accounting purposes. For many investors, obtaining financing is a crucial step in acquiring and maintaining a profitable rental property portfolio. However, finding the right loan can be the most challenging part, particularly if you’re seeking a loan that is based on the property value and quality of investment, rather than personal income or credit score.

DSCR rental loans in Connecticut allow for property financing without most of the time-consuming steps and stringent requirements that may come from a bank loan.  This not only frees up your time during the application process, but because DSCR rental loans lock in long term financing, you don’t need to worry about refinancing and can focus on the main aspects of running your business: property management and cashflow optimization.  

We have all heard the saying “location, location, location.”  Cities like Stamford, Hartford, and New Haven provide a cosmopolitan city lifestyle while still maintaining an overall suburban feel. This mix makes them very attractive to potential tenants, resulting in low vacancy rates and high demand for rental housing.  Other towns like Greenwich, Westport, and Norwalk offer high-end suburban living with easy access to nearby cities. These towns are known for their available amenities, dining options, and neighborhoods with strong school systems.  All of these attributes are sought after by renters, especially ones looking for single family homes or condos. As a result, the demand for rental properties in these areas is high, creating attractive opportunities for Connecticut real estate investors.

Due to the stabilize economy in the state of Connecticut, housing tends not to fluctuate as much as other areas of the country.  The risk of major crashes, or spikes in vacancy rates has historically been low.  This predictable rental income fits very well with DSCR rental loan requirements.

Getting a DSCR Rental Loan in Connecticut

Traditional banks have strict requirements for real estate loans, and these restrictions have only tightened as of late. This is especially the case if you have problematic credit or are looking to acquire a broad real estate portfolio with multiple properties.  Even if you have strong credit, banks place substantial emphasis on the perceived financial health of the underlying borrower, meaning the more debt you take on (even if it’s “good” debt to finance real estate) the harder it will be to get the next loan since your monthly debt payment will be increased.

However, there is good news for Connecticut real estate investors who elect to use DSCR rental loans.  With this type of loan, a lender evaluates each property on a standalone basis, so there is little correlation between your credit or the number of properties that you own, with your ability to secure a loan.  An additional important benefit is speed – a Connecticut DSCR loan is approved significantly faster than a traditional bank loan; in fact, we fund loans in as fast as 2 weeks.

Asset Based Lender Providing Rental Loans in Connecticut

Our specialty is fast lending on real estate assets that have net operating income (NOI) in excess of the loan debt service on the property.  We understand that real estate investors are entrepreneurs and don’t always have a steady paycheck.  And even if you do, who wants to wait months and provide all sorts of proof of income and bank statements.  Whether you are looking to purchase your first rental property or expand your existing portfolio, we are here to help.

Ready to get started? Contact us today to learn more about the DSCR rental loan program for your Connecticut investment property.


Also known as a Debt Service Coverage Ratio loan, a DSCR loan is a type of real estate mortage loan that can be used to purchase or refinance a property. They differ from a traditional mortgage loans in two primary ways:

They are intended for investment properties only and they are based on the value and rental income potential of the property rather than the income of the borrower.

You are typically eligible for a DSCR loan if the below conditions are met:

  • The property is a condo, single-family residence, a duplex, triplex, quadplex, or multi-family
  • Investment property, cannot be primary residence
  • The property does not require rehab
  • The property is an LLC rather than a personal name (can be transferred to an LLC upon closing)
  • Insurance and taxes are up to date

Since DSCR loans are primarily lent on the asset rather than the borrower’s credit or income, FICO requirements are limited.  Typically, a score above 660 will work.

Additionally, since the property must be able to be able to produce income, vacant land, or primary residences are not permitted.

The minimum DSCR ratio requirement is typically 1.1x. DSCR ratios are calculated by dividing the Net Operating Income (NOI) by the Property Debt Service. The NOI is equal to the total rent minus taxes and insurance, while the Debt Service is equal to the mortage payment (principal plus interest).

DSCR loans make it possible for borrowers with non-W2 income and other non-traditional income sources to receive a loan to purchase real estate since they are based on the value of the property and the property’s ability to generate rental income and cashflow. As mentioned, these types of loans are not based on personal income, making the borrower’s income irrelevant.

There are several benefits which make DSCR loans superior to bank loans or other real estate financing products.  First, DSCR loans make it possible for borrowers with non-traditional forms of income to obtain a mortgage. Second, even if you can satisfy a bank’s requirements for income, DSCR loans allow borrowers with credit issues to secure a mortgage.  Finally, DSCR loans are simply much faster to get – they can be approved within as little as two weeks, a significantly shorter amount of time than a traditional mortgage loan.

The most common misconception about DSCR loans is that borrowers assume the qualification terms are the same for these types of loans as they are for traditional mortgage loans. But this is incorrect. Unlike mortgage loans, DSCR loans do not have any income requirements, and much fewer credit requirements. This makes it more likely for borrowers to receive funding for real estate properties that they otherwise would not qualify for.

One potential drawback to a DSCR loan can be the down payment requirement upon purchase, which can sometimes be close to 20 or 25% of the purchase price. A second drawback is that the mortgage rates tend to be a bit higher than traditional mortgage loans.  And finally, unlike traditional mortgage loans, DSCR loans are usually provided by smaller lending companies, so it’s important to understand the loan and be comfortable with the company providing it.

A lender evaluates the borrower’s ability to repay a DSCR loan based on the property’s DSCR ratio. As mentioned earlier, this metric takes into account the property’s NOI (Net Operating Income) and the total debt service.

The NOI is the income amount expected to be generated by a property after all operating expenses have been deducted (utilities, maintenance on the property, management fees, etc.).

The total debt service includes both the principal amount and interest payments due on the loan.

When both are taken into consideration, the ratio often needs to be at least 1.1x to show lenders that the borrower will have enough cash flow coming from the property to make the mortgage payments on the loan.

Borrowers can improve their chances of getting approved for a DSCR loan by having cash on hand to cover the down payment amount in the event of a purchase (which can be close to 20-25% of the purchase price).  (It’s worthwhile to note that borrowers don’t need to come up with a down payment when refinancing into a DSCR loan).  They also can improve their chances of being approved by having the property held in an LLC, rather than in the borrower’s name. The type of property and its use will matter as well – investment properties such as condos, single-family residences, multi-family homes, and some commercial properties will likely be easier to approve than land, primary residences, or properties for industrial use.

Borrowers can use a DSCR loan to expand their business by purchasing their first rental property and additional rental properties thereafter.   In fact, when using DSCR loans, there is no limit on the number of properties that can be acquired, so long as each property is able to produce cash flow with an acceptable DSCR ratio (typically 1.1x or more).  Before applying for a loan, borrowers should have enough cash to cover the down payment on the property.  They should also evaluate the costs associated with each rental purchase, including utility fees, any potential HOA costs, management fees, and maintenance expenses.   These costs, plus the mortgage payment should be compared against the actual or potential rents to make sure there is sufficient coverage.  In the event of refinancing, a DSCR loan can also be used.  In this case, the borrower should make sure that the maximum loan amount can be covered by the same calculation.

West Forest Capital is the fastest Bridge Lender in Connecticut

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We fund Bridge Loans in one week.
Commercial and industrial loans are funded in two weeks.

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