Kentucky DSCR Loans for STR Financing
Grow Your Portfolio with DSCR Loans
Whether you're financing STRs in Louisville, long-term rentals in Lexington, or small multi-family properties in Bowling Green, our DSCR loans
give Kentucky investors the flexibility and competitive rates needed to grow. These loans are based on your property's income—not your W-2s or credit score. We evaluate whether the rental cash flow can cover the loan obligations, making it easier to qualify. Kentucky’s mix of college towns, urban centers, and affordable housing markets offers strong rental potential. With DSCR financing, you can build or scale your portfolio without the red tape of traditional underwriting. It’s a smart option for hands-on and hands-off investors alike.
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 Kentucky real estate investors?
A DSCR loan (Debt Service Coverage Ratio loan) is structured to evaluate the property's ability to pay for itself, rather than focusing on the borrower's tax returns or W-2 income. If the rental income is enough to cover the loan payments, including principal, interest, taxes, and insurance, borrowers can qualify—even with unconventional financial backgrounds. In Kentucky, where cities like Louisville, Lexington, and Bowling Green offer diverse rental opportunities, DSCR loans provide a simplified path to real estate financing that aligns with asset performance.
How is DSCR calculated in a typical loan scenario?
Kentucky investors calculate DSCR by dividing a property’s net operating income (NOI) by the total annual debt obligations, including mortgage, taxes, and insurance. For example, if a rental property in Kentucky earns $100,000 and carries $80,000 in debt service, the DSCR would be 1.25. A DSCR of 1.00 is the standard minimum accepted by most Kentucky lenders, but ratios of 1.15 or higher often result in better terms. Whether you’re investing in Louisville, Lexington, or Bowling Green, knowing how to calculate DSCR helps you determine a property’s ability to support financing. In Kentucky, a strong DSCR is essential for portfolio growth and long-term success.
What is considered a good DSCR ratio for Kentucky investors when applying for financing?
In Kentucky, a strong DSCR typically begins at 1.20. While lenders in Kentucky may accept a 1.00 ratio, that’s generally viewed as the lowest acceptable point. A 1.20 DSCR means your rental income exceeds your loan obligations by 20%, which makes the investment more attractive to lenders. Whether you're purchasing in Louisville, Lexington, or Bowling Green, aiming for a higher DSCR in Kentucky helps secure better financing terms and positions your deal for fast approval. Understanding DSCR expectations in Kentucky is vital for any real estate investor focused on portfolio growth.
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?
Lenders in Kentucky evaluate DSCR loans based on the rental income the property earns, not the borrower’s personal income. In Kentucky, lenders review documents like lease agreements, short-term rental income history, or appraiser rent analysis to determine net operating income. That figure is then compared to the property’s loan payments to calculate the DSCR. A ratio of 1.00 or more is generally required for approval. DSCR loans in Kentucky are ideal for real estate investors who want to qualify using property cash flow. Understanding how rental income is evaluated in Kentucky helps you plan smarter, faster-growing investments.
What’s the minimum debt service coverage ratio required for approval?
Louisiana DSCR lenders typically require a minimum ratio of 1.00 to approve a loan. This means the property must generate enough income to fully meet its annual debt obligations. In some cases, Louisiana lenders may accept a DSCR of 0.75 with strong supporting factors. However, a 1.20 DSCR is recommended in Louisiana to secure better rates and reduced reserve requirements. DSCR loans in Louisiana are commonly used by investors in New Orleans, Baton Rouge, and Shreveport. Understanding how lenders in Louisiana set DSCR minimums helps borrowers prepare stronger loan applications and reduce underwriting challenges.
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. Kentucky borrowers use DSCR loans to avoid income documentation and focus instead on property performance. Whether you’re investing in Louisville or Lexington, Kentucky investors benefit from quicker closings and simplified underwriting. DSCR financing in Kentucky is ideal for those building scalable rental portfolios.
