Financing
DSCR loans
in Myrtle Beach.
By Devin Day, Operations Officer & licensed MLO · Chapter3 Realty · Updated August 15, 2026
DSCR loans are how most Grand Strand investors finance buy-and-hold property. Here is how they work and where they get tricky.
At a glance
Decide in ten seconds if this fits you
Why people do it
- +No tax returns or W-2s needed
- +Works for self-employed and portfolio buyers
- +The deal stands on its own numbers
- +Can close in an LLC
What can go wrong
- !Bigger down payment than a normal loan
- !Rates run higher than a standard mortgage
- !Weak rent means no loan
- !Some condo buildings do not qualify
The five steps
How a DSCR loan works, step by step
A DSCR loan qualifies on the property's own rent, not your tax returns. DSCR is short for debt service coverage ratio. In plain words: the rent the home collects, divided by the loan payment it must cover. No W-2s, no tax returns, no debt-to-income math.
- 1
Find the property. The loan is judged on the property's rent, not on your income.
- 2
The appraiser sets the market rent. The lender uses that figure, not yours and not ours. On a nightly rental, only 75 percent of it counts.
- 3
Divide the rent by the payment. That figure is the DSCR. Above 1.00 means the rent more than covers the payment.
- 4
Show credit and the down payment. A score in the high 600s and up, and 20 to 25 percent down on most deals here.
- 5
Close in your name or an LLC. No W-2s and no tax returns are asked for at any step.
That fits self-employed buyers and investors building a portfolio. The loan can also close in an LLC, a company you own that holds the property. An LLC keeps a portfolio tidy and helps with a 1031 exchange (sell one rental, buy another, put off the tax bill). Here is the whole idea in one example.
The math
How to calculate DSCR
Example with round numbers
The rent covers the payment 1.2 times over.
That 1.20 is the number the lender judges the deal on. You want it over 1.00, which means the rent more than covers the payment. On a refinance some lenders go as low as 0.75, but for a purchase aim above 1.00.
Qualifying
What lenders check
Every lender differs a little, but most DSCR programs look at four things.
- ✓
The ratio. Purchases want 1.10 to 1.25 or better. Refinances can go as low as 0.75, but over 1.00 is the goal.
- ✓
Your credit. A score in the high 600s and up.
- ✓
The down payment. Plan on 20 to 25 percent for most deals here.
- ✓
Nightly rental income. Appraisers here often estimate high, so only 75 percent of the estimate counts.
What if the ratio is below 1.00?
A ratio of 1.00 means the rent exactly matches the payment. Above 1.00, our preferred lender asks for a standard investor down payment. Below 1.00, our preferred lender can still write the loan. Expect a bigger down payment and a higher rate; we price it deal by deal.
One more thing: around here, the building itself can determine whether a lender will finance it.
Local wrinkles
Where DSCR loans get tricky on the Grand Strand
Let us help with your next investment.
Send us the address. We will run the rent, the expenses and the association documents before you write an offer, at no cost.
Call 854.333.2135Common questions
Frequently asked questions
What is a good DSCR for an investment property?
Most lenders want 1.10 to 1.25 or higher on a purchase. That means the rent covers the payment with room to spare. A 1.00 ratio breaks even. On a refinance, some lenders go as low as 0.75. Above 1.00, our preferred lender asks for a standard investor down payment. Below 1.00, they can still finance the deal, but expect a bigger down payment and a higher rate; we price it deal by deal.
Can I get a DSCR loan in South Carolina with no income verification?
Yes. DSCR loans do not use personal income, tax returns, or debt-to-income ratios. The property's rent and the appraisal carry the application, which is the main reason investors choose them over conventional financing.
How much down payment does a DSCR loan require?
Expect a larger down payment than an owner-occupied loan on most Grand Strand DSCR loans. Condotels and non-warrantable condos often require more, and a larger down payment improves both the rate and the qualifying ratio.
Can I use short-term rental income to qualify?
Sometimes. Some DSCR lenders accept short-term rental income. Around the Grand Strand, appraisers often provide high short-term rental income estimates, but only 75 percent of that figure can be counted as qualified income, so the number used to qualify is more conservative than the appraisal suggests. Long-term lease income is simpler to qualify on.
Can a DSCR loan close in an LLC?
Yes, and many investors prefer it. Closing in an LLC keeps a portfolio organized, supports partnerships, and is often necessary for a 1031 exchange. Chapter3 can coordinate the property and the loan together so the structure is right at closing.
Can I get a DSCR loan if the property does not cash flow?
Yes. Our preferred lender can write DSCR loans even when the ratio is below 1.00. That suits beach properties you buy for the rise in value, where rent does not fully cover the payment. Expect a bigger down payment and a higher rate; we price it deal by deal. Above 1.00, the program asks for a standard investor down payment.