Michigan DSCR Loans for STR Financing
Grow Your Portfolio with DSCR Loans
Whether you're purchasing STRs in Traverse City, long-term rentals in Detroit, or college housing near Ann Arbor, our DSCR loans
provide Michigan investors with the flexibility and competitive financing they need to grow. DSCR loans qualify you based on property cash flow, not your personal income or credit score. We assess whether your investment generates enough rental income to cover the loan, making it easier to secure funding. Michigan’s mix of urban markets, vacation towns, and stable rental demand makes it an excellent place for portfolio expansion. Our team makes the lending process smoother, faster, and focused entirely on the asset.
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 Michigan real estate investors?
A DSCR loan (Debt Service Coverage Ratio loan) lets investors qualify based on the rental income of the property rather than their personal financial background. As long as the income covers the loan’s debt service, the borrower may be eligible without submitting W-2s or tax returns. This is ideal for real estate investors purchasing through LLCs or managing multiple properties. In Michigan, where strong rental demand exists in cities like Detroit, Ann Arbor, and Grand Rapids, DSCR loans help investors move faster on deals and scale across high-performing markets.
How is DSCR calculated in a typical loan scenario for Michigan investors?
In Michigan, DSCR is calculated by dividing the net operating income (NOI) from a rental property by the annual debt service. For example, if a Michigan investment property produces $84,000 in NOI and carries $70,000 in debt obligations, the DSCR would be 1.20. This suggests the property generates enough cash flow to comfortably support the loan. While many Michigan lenders accept a 1.00 DSCR, ratios above 1.20 can improve your interest rates or reduce reserve requirements. Whether you’re targeting markets like Detroit, Ann Arbor, or Grand Rapids, understanding DSCR is essential for successful property financing in Michigan.
What is considered a good DSCR ratio when applying for financing?
In Michigan, a DSCR of 1.20 is widely considered a good target. Although 1.00 may be the technical minimum, higher DSCRs reflect better property performance and reduce the lender’s risk. A 1.20 DSCR in Michigan means the property earns 20% more than needed to meet its loan obligations. Whether you’re investing in Detroit, Ann Arbor, or Grand Rapids, maintaining a strong DSCR improves your financing options and streamlines the approval process. Understanding DSCR expectations in Michigan helps investors confidently grow their rental portfolios while minimizing 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?
Michigan lenders evaluate DSCR loan eligibility by focusing entirely on the property’s rental income. In Michigan, lenders will assess leases, STR earnings, or rent comparables to estimate net operating income. That income is then divided by annual debt service to calculate the DSCR. As long as the ratio meets or exceeds 1.00, Michigan borrowers may qualify—even with limited or complex personal finances. DSCR loans in Michigan are especially popular with self-employed investors. Understanding how rental income is evaluated in Michigan helps investors avoid traditional income hurdles and qualify using property cash flow.
What’s the minimum debt service coverage ratio required for approval?
Michigan DSCR lenders usually require a minimum ratio of 1.00, meaning the property must earn enough to cover its annual loan payments. In select cases, Michigan lenders may approve DSCRs down to 0.75, but this generally requires additional strengths such as liquidity or experience. A DSCR of 1.20 or above is considered solid in Michigan, especially in markets like Detroit, Grand Rapids, or Ann Arbor. DSCR loans in Michigan are ideal for real estate investors looking to grow portfolios without relying on personal income. Understanding Michigan’s minimum DSCR guidelines ensures a smoother approval process and stronger loan terms.
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 Michigan, DSCR loans make it possible to finance rental properties without relying on W-2s or tax returns. From Detroit to Grand Rapids, Michigan investors use these loans to scale faster and simplify the approval process. DSCR financing in Michigan supports both long-term and short-term rental strategies.
