How Brokers Can Use DSCR Loans to Close More Deals

Investors make up an increasingly large portion of residential home purchases, with nearly 33% of all single-family homes being purchased by investors in Q2 of 2025. The growing demand for rental properties among real estate investors presents a massive opportunity for brokers and lending partners. However, there are common friction points brokers face when using conventional financing options, from longer application turnaround to stricter qualification requirements. Many are turning to DSCR loans from private lenders as a way to help their clients overcome these challenges and close more deals.

In this piece, we’ll break down the basics and benefits of DSCR loans and how lending partners can utilize these programs to grow their businesses.

Key Takeaways:

• Investor demand is surging, with nearly one-third of single-family homes purchased by investors, creating new opportunities for brokers and lenders.
• Traditional financing often slows or blocks rental deals due to income documentation, DTI limits, and long approval timelines.
• DSCR loans focus on property cash flow, not borrower income, allowing more investors to qualify and close faster.
• Brokers can use DSCR financing to grow deal volume by solving common investor roadblocks and supporting portfolio expansion.
• Strong DSCR lending partnerships enable repeat business, helping brokers become long-term financing partners for rental investors.

Understanding What Investors Want from Long-Term Rentals

First, you should understand why your clients are seeking out long-term rental properties as an investment. Aside from providing stable cash flow, rental properties offer some of the greatest appreciation out of any asset, along with tax benefits and strong equity building potential. This maintains their demand with both first-time and seasoned investors, as well as on the open market.

Financing flexibility plays a key role in an investor’s ability to grow their portfolio, as not only can private loans be approved faster, but they also generally have less stringent requirements. Brokers should position these loans as problem-solving tools that can facilitate portfolio expansion.

Why Traditional Financing Can Stall Long-Term Rental Deals

Conventional mortgages can be used for acquiring rental properties, but investors quickly run into issues that can prevent them from securing a loan:

• Self-employed clients or portfolio investors may not have W-2 income, which means they cannot secure a loan that requires it
• FHA loans have strict DTI constraints that not every investor will meet
• Loan approval can take weeks or even months, causing investors to miss out on time-sensitive opportunities

These investors require financing that can meet their needs, and they are increasingly seeking out property-focused solutions in the form of DSCR loans.

How DSCR Loans Remove Qualification Roadblocks

DSCR loans are a form of rental property financing offered by private lenders who operate in the real estate space. Loan qualification is based on a property’s Debt-Service Coverage Ratio (or in other words, monthly NOI) rather than the borrower’s personal income or credit history. These loans also have reduced documentation requirements that result in a streamlined underwriting process where deals can be funded faster. It also means that borrowers can still qualify for financing even if they don’t meet the strict requirements of conventional loans, so long as the property’s monthly cash flow is healthy. Brokers can utilize DSCR loans to say “yes” to more investment scenarios and expand their deal pipeline.

Take a look at your existing customer base to identify good opportunities for DSCR financing. Make note of the investors who are looking to rapidly expand their portfolios and are approaching the limits of conventional mortgages. Also highlight how private loans can still provide your clients with financing when they don’t meet the DTI requirements of bank loans. DSCR loans offer these investors a repeatable and reliable solution for acquiring multiple properties, and their streamlined closing process means your clients can win more often in highly competitive markets.

Turning Long-Term Rental Deals into Ongoing Broker Relationships

Brokers can also use DSCR financing as the basis of long-term business relationships. DSCR loans are designed for continued portfolio growth, with terms that facilitate repeat investing. Rental property investors often return to their lending partners for additional financing, whether it be for new acquisitions, refinancing, or shifting their investment strategy. For lending partners, this means being able to become a go-to financing partner for these clients. Delivering consistency and value beyond the loan is key to building these long-term partnerships and can even lead to additional business through referrals to other investors.

Partnering with the Right Wholesale Lender

The key to success in the DSCR space is partnering with a wholesale lender that can help you meet your clients’ needs. You will want to partner with lenders that can offer flexible guidelines, a streamlined underwriting process, and are responsive in communication. A stellar lending partner will go above and beyond, providing you with resources like marketing materials and training programs that support your lending efforts.

It’s not just about securing the best terms, but providing you and your customers with the best financing experience. A client who has a smooth and speedy transaction will be more likely to return to you for repeat business, and this can be a major factor in your business’ growth.

RCN Capital

To maximize the returns on your clients’ investments, partner with a lender that can provide you with the best leverages and rates. RCN Capital lends to real estate professionals, commercial contractors, developers and small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors and lending partners. If you are looking to offer rental property financing to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.