How Salute Evaluates DSCR: The Smarter Way to Qualify Without W-2s

Last updated: October 2025

Quick Answer

Salute qualifies real estate investors for DSCR loans using the property’s rental income—not your W-2s or tax returns.

By calculating the debt service coverage ratio (DSCR) correctly and early, Salute avoids common loan denials and speeds approvals. It’s a smarter, cash-flow-first approach tailored for full-time investors and side-hustle landlords alike.

What is a DSCR loan?

A debt service coverage ratio (DSCR) loan is a non-QM mortgage designed specifically for real estate investors. It uses a simple formula to determine eligibility:

DSCR = Gross Rent ÷ PITIA

(PITIA = Principal, Interest, Taxes, Insurance, HOA)

This loan type is ideal for:

• Investors without traditional income documentation
• Buyers of cash-flowing rental properties
• Self-employed landlords
• Borrowers with high write-offs or multiple properties

There are no W-2s, no tax returns, and no employment verification required; just property income and a strong deal.

How Salute calculates DSCR for fast, accurate pre-approvals

Salute Mortgage takes a front-loaded approach to DSCR qualification. Instead of issuing soft approvals based on assumptions, the team calculates your true DSCR using real numbers up front.

The formula:

Gross Monthly Rent ÷ PITIA = DSCR Ratio

Here’s what Salute includes:

• Market Rent or signed lease
• Loan payment estimate based on rate, term, and LTV
• Local tax rates and insurance quotes
• HOA dues, if applicable
• Prepaid expenses and reserves

This means your approval is solid before you go under contract. It isn’t subject to surprises during underwriting.

What’s a qualifying DSCR ratio

Most DSCR lenders require a DSCR of at least 1.00x, meaning the property generates enough rent to fully cover the mortgage payment.

Typical thresholds:

• 1.25x or higher = ideal, lower rate
• 1.00x–1.24x = acceptable, possibly higher rate
• <1.00x = negative cash flow; higher risk, fewer approvals

Salute Mortgage carefully evaluates borderline deals, helping investors restructure offers or increase down payments to meet qualifying ratios.

What documents do you need for a DSCR loan

DSCR loans streamline documentation. You do not need:

• W-2s
• Tax returns
• Pay stubs
• Bank statements (unless for reserves)

What you will need:

• Rent documentation (lease or appraiser rent schedule)
• Purchase contract
• Entity docs (if buying in LLC or trust)
• Asset verification (for down payment and reserves)
• Valid ID and credit report authorization

Salute assembles these documents during pre-approval so you’re ready to move quickly when you find a property.

How DSCR loans support portfolio growth

Because DSCR loans rely on property performance—not borrower income, they allow investors to scale faster.

You can:

• Close in the name of an LLC
• Use projected rent for vacant units
• Acquire multiple properties at once
• Layer short-term rental income with market rent comps
• Reuse equity from refinanced DSCR properties

Salute works with seasoned investors and first-time landlords to structure loan terms aligned with long-term portfolio goals.

Using DSCR for short-term and Airbnb rentals

Salute also evaluates DSCR loans for short-term rentals, such as Airbnb or VRBO properties. These require special handling because projected rent may not reflect consistent monthly income.

To qualify for a short-term rental:

• The appraiser must provide the market rent based on long-term lease potential
• Actual STR income may be considered if you have a 12-month history and ownership
• Salute may use a 12-month average from Airbnb statements, 1099s, or bank deposits
• Property must be zoned for short-term use and meet local regulations

If your STR income can’t be used, Salute will qualify the property using the appraiser’s long-term rental estimate. This ensures compliance with most DSCR lender policies and keeps the loan moving.

Salute helps investors navigate this complexity early in the pre-approval process, providing realistic DSCR calculations even if the property operates seasonally or in a tourist market.

Why DSCR denials happen—and how Salute prevents them

Most DSCR loan denials stem from inaccurate DSCR calculations or delayed income documentation.

Common mistakes include:

• Using owner-provided rent estimates instead of market rent
• Failing to include full PITIA costs
• Overlooking HOA dues or tax adjustments
• Assuming short-term rental income without appraiser support

Salute avoids these errors by:

• Calculating DSCR using verified third-party data
• Running scenarios for both long- and short-term rentals
• Including buffers for insurance and reserves
• Reviewing investor strategy before structuring the deal

This means fewer surprises, stronger approvals, and faster closings.

How Salute supports DSCR borrowers at every step

Salute is more than a loan provider; it’s your investment mortgage partner. The team helps you qualify, structure, and close smarter.

Here’s what you can expect:

• Initial deal screening for DSCR feasibility
• Rate and term comparisons based on DSCR tiers
• Entity title review for LLC purchases
• Escrow and insurance coordination
• Clear conditions upfront, not surprises at closing

Even if your first deal doesn’t qualify today, Salute can help reposition it or guide you to one that does.

Build your portfolio without showing your W-2s

A DSCR loan from Salute gives you the freedom to build wealth without traditional income proof.

Whether you’re scaling up rentals or buying your first investment property, Salute Mortgage calculates the numbers correctly from the start. This means your approval is real, your rate is accurate, and your timeline stays on track.

Check your DSCR loan eligibility today.