Iowa DSCR Loans for STR Financing
Grow Your Portfolio with DSCR Loans
Whether you're financing rental properties in Des Moines, student housing in Iowa City, or STRs in Cedar Rapids, our DSCR loans
offer Iowa investors a straightforward way to qualify based on property income. With flexible terms and competitive rates, DSCR loans are built for asset-focused lending—no tax returns, W-2s, or personal income verification needed. We look at the property’s cash flow to determine if it can support the loan independently. Iowa’s steady rental market and lower barrier to entry make it a smart place to grow a real estate portfolio. From first-time buyers to seasoned investors, DSCR financing helps you scale more efficiently with fewer obstacles.
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 Iowa real estate investors?
A DSCR loan (Debt Service Coverage Ratio loan) is a type of real estate financing that qualifies investors based on rental income rather than personal income, tax returns, or W-2s. Lenders calculate whether the property's income is enough to cover monthly obligations like the mortgage, taxes, and insurance. This structure is ideal for investors with complex financials or those who want to scale efficiently. In Iowa, where markets like Des Moines, Iowa City, and Cedar Rapids offer affordable entry points and reliable rental demand, DSCR loans provide a flexible way to finance both STRs and long-term investments.
How is DSCR calculated in a typical loan scenario?
DSCR in Iowa is calculated by dividing a property's net operating income (NOI) by its total debt service, which includes the mortgage, taxes, and insurance. For instance, if an Iowa rental generates $78,000 in NOI and has $65,000 in annual loan obligations, the DSCR would be 1.20. This shows that the property produces more income than needed to repay the loan. Most Iowa lenders require a minimum DSCR of 1.00, but a stronger ratio improves approval odds and terms. Whether you're investing in Des Moines, Cedar Rapids, or Iowa City, understanding DSCR is key to securing competitive financing in Iowa’s rental market.
What is considered a good DSCR ratio for Iowa investors when applying for financing?
For Iowa investors, a DSCR of 1.20 or higher is typically seen as a good threshold. While the 1.00 minimum may be enough to qualify, a stronger DSCR means better odds of approval and more attractive loan conditions. In Iowa markets like Des Moines, Cedar Rapids, or Iowa City, a solid DSCR helps demonstrate that the property generates more than enough income to handle the loan. Understanding how DSCR works in Iowa is crucial for investors seeking sustainable, long-term growth with minimal financing friction.
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 Iowa, DSCR loan approval is based on the property’s ability to produce rental income—not the borrower’s personal financials. Lenders in Iowa review documents like leases, market rent evaluations, or Airbnb income to estimate net operating income. This figure is then used to calculate the DSCR by dividing it by the property's annual debt service. If the ratio meets or exceeds 1.00, Iowa investors can qualify, even with limited personal income. DSCR loans in Iowa give self-employed borrowers and real estate investors more flexibility. Understanding how rental income is evaluated in Iowa helps ensure a smoother, faster loan approval process.
What’s the minimum debt service coverage ratio required for approval?
In Iowa, most lenders require a minimum DSCR of 1.00 to approve a DSCR loan, meaning the property must generate enough income to fully cover its debt service. While some Iowa lenders may approve DSCRs as low as 0.75, this typically requires strong reserves, equity, or borrower experience. A DSCR of 1.20 or more is preferred in Iowa to improve loan terms and underwriting ease. DSCR loans in Iowa offer flexibility to investors who don’t qualify through conventional income verification. Understanding Iowa’s DSCR requirements helps you better structure deals for approval in markets like Des Moines, Cedar Rapids, and Sioux City.
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 Iowa, DSCR loans are commonly used to sidestep traditional mortgage barriers by focusing on property performance. Whether investing in Des Moines or Cedar Rapids, Iowa borrowers gain faster approvals and lower documentation requirements. DSCR lending helps Iowa investors move quickly in competitive markets.
