Illinois DSCR Loans for STR Financing
Grow Your Portfolio with DSCR Loans
Whether you're financing rentals in Chicago, duplexes in Springfield, or STRs in Naperville, our DSCR loans
offer Illinois investors the flexibility and competitive rates needed to grow their portfolios. With a focus on asset performance, DSCR loans skip the traditional income verification process. We look at property cash flow to determine eligibility and support your real estate goals. Illinois markets offer both high occupancy metro areas and stable long-term rental demand, making DSCR loans ideal for both STR and buy-and-hold strategies. Let us help you qualify faster and scale with confidence.
How to qualify
To obtain a quote, we will need the following information:
Property Value and
Purchase Price
Down Payment
Amount
Credit Score
Asset Types
- Single Family Homes
- Townhomes
- Condos
- 2 - 4 Units (Duplex, Triplex, Quadplex)
- Multi-Family: 5 - 8 Units
- Mixed-Use: 2 - 8 Units
- Multi-Family: 9+ Unit
Loan Terms
- Loan Sizes:
$100k up to $3.5 Million (Larger loan sizes available on a case by case basis)
- Purchase LTV:
Up to 85%
- Rate & Term Refinance LTV:
Up to 80%
- Cash Out Refinance LTV:
Up to 80%
- Amortization:
30 Year % 40 Year Amortization Options Available
- Term Lengths:
5/6 ARMs, 7/6 ARMs, 10 Year Interest Only, 30 Year Fixed & 40 Year Fixed
- Floor Rate:
5.50% (subject to change daily due to market volatility)
- Full Recourse
with personal guarantee required for all borrowers with majority ownership (typically 20%+ or 25%+ if closing in an Entity)
- DSCR Requirement: 1.00x or greater depending on loan size and property type. Sub-1.00x DSCR and NO DSCR options available.
- Vesting:
Lending to Individuals, LLCs, and Corporations. Trusts Allowable on a Case by Case Basis.
- Average Time to Close:
14 to 35 days
Wondering if you qualify for investment property financing in your area?
We offer lending services in all 50 states!
Frequently Asked Questions
What is a DSCR loan and how does it work for Illinois real estate investors?
A DSCR loan (Debt Service Coverage Ratio loan) is an investor-focused financing option that bases approval on the rental income of a property rather than the borrower’s personal financials. Lenders assess whether the property’s cash flow is sufficient to cover its loan obligations—including mortgage, taxes, and insurance. This model works well for real estate investors who are self-employed, scaling quickly, or buying through LLCs. In Illinois markets like Chicago, Springfield, and Naperville, DSCR loans help investors secure funding based on the strength of the asset, not personal income.
How is DSCR calculated in a typical loan scenario?
Illinois investors calculate DSCR by dividing the property’s net operating income (NOI) by its total annual debt obligations. If a rental property in Illinois earns $110,000 in NOI and carries $90,000 in yearly mortgage, taxes, and insurance costs, the DSCR would be 1.22. This signals that the property produces more than enough to service its loan, which strengthens loan approval chances. A DSCR of 1.00 is typically the minimum accepted by Illinois lenders, but many prefer 1.20 or higher—especially in cities like Chicago, Springfield, or Naperville. Understanding DSCR in Illinois helps investors evaluate rental performance and secure favorable financing across a competitive market.
What is considered a good DSCR ratio for Illinois investors when applying for financing?
A DSCR of 1.20 is generally considered strong in Illinois. While lenders may approve a loan with a DSCR of 1.00, this is often the minimum threshold. A 1.20 ratio indicates that the property earns 20% more than it needs to cover the loan, which reassures lenders and can lead to better terms. Whether you're investing in Chicago, Springfield, or Peoria, a solid DSCR improves your chances of approval and can reduce reserve requirements. Understanding what qualifies as a good DSCR in Illinois helps you assess risk and structure deals that are financially sustainable.
Can I qualify for a DSCR loan if my personal income is limited?
Yes, you can qualify for a DSCR loan even if your personal income is limited. DSCR loans, often referred to as Airbnb loans when used for short-term rental properties, are designed to approve borrowers based on the income the property generates—not personal W-2s, tax returns, or debt-to-income ratios. Lenders calculate the property's debt service coverage ratio to determine if the income is sufficient to support the loan. As long as the DSCR meets the required threshold—usually 1.00 or higher—you can often be approved regardless of personal income. This makes Airbnb loans ideal for self-employed investors, business owners, or anyone scaling a rental portfolio without relying on traditional underwriting standards.
How does a lender evaluate rental income when approving a DSCR loan?
In Illinois, DSCR lenders evaluate the property's income-producing ability by reviewing rental documentation like leases, Airbnb income, or market rent assessments. Illinois borrowers are not evaluated based on W-2s or personal tax returns. Instead, lenders in Illinois use net operating income to determine the DSCR, comparing it to projected loan payments. A DSCR of 1.00 or higher is typically required to qualify. This approach allows Illinois investors to qualify based on property performance alone. Understanding how rental income is evaluated in Illinois helps simplify the lending process and maximize financing opportunities for real estate professionals.
What’s the minimum debt service coverage ratio required for approval?
In Illinois, the minimum DSCR required to qualify for most DSCR loans is 1.00, ensuring the property generates enough income to cover its annual debt service. Some Illinois lenders may allow DSCRs down to 0.75 for well-capitalized investors, but this is the exception rather than the rule. A DSCR of 1.20 or higher is recommended for better loan terms in Illinois, particularly in markets like Chicago, Springfield, or Peoria. DSCR loans in Illinois are ideal for borrowers with complex income profiles. Understanding the DSCR minimums in Illinois equips investors with the clarity needed to prepare strong applications and minimize underwriting friction.
Who should consider using a DSCR instead of a traditional loan?
These loans are perfect for self-employed individuals, LLCs, and investors managing multiple properties. In Illinois, DSCR loans allow borrowers to bypass W-2s and tax returns by qualifying through property income. From Chicago to Peoria, Illinois real estate investors use this structure to scale portfolios without the friction of traditional loan underwriting. DSCR lending in Illinois supports faster closings and long-term growth.
