Oregon DSCR Loans for STR Financing

Frequently Asked Questions

What is a DSCR loan and how does it work for Oregon real estate investors?

A DSCR loan (Debt Service Coverage Ratio loan) is built for real estate investors who want to qualify using a property's income instead of personal earnings or tax documents. Lenders look at whether the rental income is enough to fully cover the property's debt service, including the mortgage, taxes, and insurance. This approach benefits investors with multiple properties or non-traditional income streams. In Oregon, where rental markets in cities like Portland, Eugene, and Bend are competitive and diverse, DSCR loans allow investors to act quickly and scale without traditional documentation barriers.

How is DSCR calculated in a typical loan scenario?

DSCR in Oregon is calculated by dividing the net operating income (NOI) of a property by the total annual debt service, including mortgage payments, taxes, and insurance. For example, if an Oregon rental brings in $108,000 in NOI and the annual loan obligations total $90,000, the DSCR would be 1.20. That level of income coverage is often preferred by lenders. While 1.00 is typically the minimum DSCR for approval, Oregon investors aiming for stronger terms—especially in cities like Portland, Bend, or Eugene—should target ratios of 1.20 or higher. Understanding DSCR helps investors in Oregon assess rental performance and financing potential.

What is considered a good DSCR ratio for Oregon investors when applying for financing?

Oregon lenders typically consider a DSCR of 1.20 or higher to be ideal. While a 1.00 ratio might pass minimum underwriting standards, it leaves little room for unexpected costs. A 1.20 DSCR in Oregon shows that your property’s income exceeds the debt service by 20%, which can lead to better loan conditions. Whether you’re buying in Portland, Eugene, or Bend, understanding what qualifies as a good DSCR in Oregon helps real estate investors evaluate property performance and secure financing with greater confidence.

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?

Oregon lenders base DSCR loan approval on rental income generated by the property rather than the borrower’s income. To establish income, Oregon investors provide documentation like lease agreements, STR statements, or market rent reports. The DSCR is calculated by comparing this income to annual loan obligations. A minimum ratio of 1.00 is generally required. DSCR loans in Oregon are ideal for self-employed borrowers and those expanding portfolios with limited income documentation. Understanding how rental income is evaluated in Oregon helps ensure that the property itself qualifies—making the process faster and more flexible for Oregon investors.

What’s the minimum debt service coverage ratio required for approval?

In Oregon, the minimum DSCR required for most loans is 1.00, indicating that the property earns enough to fully cover its debt service. Some Oregon lenders may allow DSCRs down to 0.75, though that usually applies only to experienced investors with solid reserves. A DSCR of 1.25 is often preferred in Oregon, especially in high-demand markets like Portland, Bend, or Eugene. DSCR loans in Oregon offer flexibility, but higher ratios improve terms and ease underwriting. Understanding Oregon’s DSCR minimums helps real estate investors structure stronger applications and close more efficiently.

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. Oregon real estate investors often turn to DSCR loans to avoid traditional income verification. Whether you're buying in Portland, Bend, or Eugene, Oregon borrowers benefit from quick approvals and asset-focused underwriting. DSCR lending in Oregon supports STR and long-term rental growth with fewer limitations.

Expanding your rental portfolio beyond Oregon? We also offer financing in Washington and California , making it easy to scale along the West Coast with the same asset-based approval process.