What Is a DSCR Loan? How Real Estate Investors in Wisconsin Use It to Build Wealth in 2025
DSCR loans in Wisconsin are becoming a go-to tool for real estate investors in 2025. These loans help buyers qualify based on rental income, not tax returns - making them ideal for self-employed borrowers and multi-unit property deals.
DSCR stands for Debt Service Coverage Ratio, and it’s changing the game for investors who want to qualify for a mortgage based on the property’s cash flow - not their tax returns.
In 2025, DSCR loans have become a go-to strategy for real estate buyers who want to scale their portfolios without jumping through the usual income and employment hoops.
How DSCR Loans Work
Instead of verifying your income through W-2s or tax returns, a DSCR loan focuses on one thing: Does the property generate enough income to cover the mortgage payment?
💡 DSCR Formula:
DSCR = Gross Rental Income ÷ Monthly Mortgage Payment
- A DSCR of 1.0 means the property breaks even
- A DSCR above 1.0 = positive cash flow
- Most lenders prefer 1.15+, but some go lower with strong credit or reserves
Why DSCR Loans Are Exploding in Wisconsin
With low inventory and tight credit guidelines across traditional loans, DSCR loans are giving investors a competitive edge.
Here's why investors are using them:
- No income or employment verification
- No tax returns required
- Close in LLC or personal name
- Use market rents or lease agreements
- Great for short-term rentals (Airbnb/VRBO) or long-term hold properties
Whether you're buying in Milwaukee, Waukesha, Madison, or a college town like La Crosse, DSCR loans let the property qualify - not your job.
Who Qualifies for a DSCR Loan?
Even first-time investors can qualify if:
- Credit score is 680+ (some allow 620)
- DSCR is 0.75 or higher (with strong reserves)
- You have 20 - 25% down payment
- You're buying a 1 - 4 unit residential property
Learn more from this trusted explainer:
DSCR Loans: What it is, Expert Advice & How to Apply (Griffin Funding)
Why 2025 Is the Year of DSCR Loans
- Traditional investor loans are tightening
- Self-employed borrowers want simpler approvals
- High interest rates are pushing lenders to focus on cash flow
- More lenders are offering interest-only DSCR products to maximize ROI
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