DSCR Loan Indiana
- LTV: 80%
- Term: 30 Year
- Rate: 7.125%
- Points: 1.5%
What are DSCR Loans used for in Ohio?
What are dscr loans used for in Indiana?
DSCR loans are a powerful financing tool for real estate investors in Indiana, allowing them to qualify for loans based on the rental income potential of the property rather than personal income.
These loans use the Debt Service Coverage Ratio (DSCR)—a calculation comparing rental income to property expenses to determine eligibility and loan amounts.
In Indiana, where rental demand is strong, DSCR loans are commonly used to finance long-term rental properties, short-term vacation rentals, and multi-unit buildings.
For those following the BRRRR investing strategy, DSCR loans are ideal for refinancing after stabilizing a property. This strategy allows investors to build a portfolio of rental properties while preserving capital for future projects.
If you're considering investing in Airbnb rentals, DSCR loans can also help finance short-term rentals in Florida’s high-demand vacation markets. Learn more in our guide: Financing Airbnb Rentals with DSCR Loans.
To understand how to calculate DSCR and determine your eligibility, visit the How to Calculate DSCR section of this page.
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DSCR loans are a powerful financing tool for real estate investors in Indiana, allowing them to qualify for loans based on the rental income potential of the property rather than personal income.
These loans use the Debt Service Coverage Ratio (DSCR)—a calculation comparing rental income to property expenses to determine eligibility and loan amounts.
In Indiana, where rental demand is strong, DSCR loans are commonly used to finance long-term rental properties, short-term vacation rentals, and multi-unit buildings.
For those following the BRRRR investing strategy, DSCR loans are ideal for refinancing after stabilizing a property. This strategy allows investors to build a portfolio of rental properties while preserving capital for future projects.
If you're considering investing in Airbnb rentals, DSCR loans can also help finance short-term rentals in Florida’s high-demand vacation markets. Learn more in our guide: Financing Airbnb Rentals with DSCR Loans.
To understand how to calculate DSCR and determine your eligibility, visit the How to Calculate DSCR section of this page.
Indiana DSCR Loan Products
Low Rates, from 1.0% Origination on Indiana DSCR loans for long term & short term rentals.
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Long Term Rental
DCSR Loans Indiana
Rates from 6.75%
LTV Up To 80%
From 1.0% Origination Points
Minimum DSCR: 1.0
Closing Time 14 Days
Appraisal Required
Minimum Credit Score: 660
Property Condition C4 Required
Purchase, Refinance, and Cash Out Available
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Short Term Rental
DCSR Loans Indiana
Rates from 6.95%
LTV Up To 80%
1-2% Origination Points
Minimum DSCR: 1.0
Closing Time 21 Days
Appraisal Required & AirDNA Check
Minimum Credit Score: 680
Property Condition C4 Required
Purchase, Refinance, Cash Out Available
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How To Determine DSCR For Indiana Rental Properties?
The Debt Service Coverage Ratio (DSCR) is calculated by dividing the monthly rent of the property by the monthly loan payment (principal + Interest), taxes, insurance and association fees (PITIA).
DSCR = Rent/PITIA
The basis of a DSCR loan in Indiana, is that the rent you collect from tenants leasing the property should be greater than the cost to own and operate the property.
Investment purpose rental properties with a DSCR greater than 1.0 are called “cash flowing”. You can calculate the DSCR of your rental property with our DSCR Loan Calculator.
(DSCR Evaluation)
Property Value: $474,000
Loan: $379,200
Interest Rate: 7.25%
Ammortization: 30 YR (FRM)
Monthly Rent: $3,995
P&I Payment: $2,586.81
Monthly Taxes: $400.00
Monthly Insurance: $180
Monthly HOA: $0
DSCR 1.26
Indiana DScr Loan process
Ridge Street closes Indiana DSCR loans in 14-21 days.
Apply Or Get Pre-Approved Online
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Receive your term sheet
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Submit Docs
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Appraisal or BPO
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Closing
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When To Use a DSCR Loan?
DSCR loans are used by investors to "hold" real estate. These loans are long term and amortizing. This allows investors to continuously gain equity in their property while generating monthly cashflow.
Investors either use DSCR loans when purchasing a property or when refinancing it. The BRRRR Investing Strategy is popular among investors in which the DSCR loan is used to "cash out" the property.
Benefits Of DSCR LoanS Compared To Other Loan Types
Other benefits of DSCR loans include:
- No income verification
- Can be used for long term and short term rentals (Financing Airbnb's for example)
- Cost Effective
Best Rental Markets In Indiana For DSCR Loans
Indiana's investment property rental market is a standout in the Midwest, offering affordability, strong cash flow potential, and diverse opportunities across urban, suburban, and college town settings. The state’s low cost of living, growing economy, and landlord-friendly laws make it a haven for retail investors seeking steady income and long-term appreciation. Key opportunities include single-family rentals in commuter-friendly suburbs, duplexes and multifamily properties in revitalizing urban neighborhoods, and student housing near major universities. Below, we’ll explore the specific cities and regions where these opportunities are most promising.
Indianapolis, IN
Indianapolis, IN, stands out as a premier rental investment market, offering affordability, strong cash flow potential, and a thriving economy. With a growing population fueled by industries like healthcare, manufacturing, and technology, the city provides a steady demand for rental properties. Neighborhoods such as Bates-Hendricks and Fountain Square offer affordable entry points and opportunities for high rental yields, while suburban areas like Fishers and Greenwood attract long-term tenants. Investors can further scale their portfolios by leveraging DSCR (Debt Service Coverage Ratio) loans, making Indianapolis a top choice for building sustainable rental income streams.
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Fort Wayne, IN
Fort Wayne, IN, presents a robust rental property investment market, driven by affordability, a growing population, and steady demand for housing. The city’s diverse economy, led by manufacturing, healthcare, and education, ensures a stable tenant pool. Investors can find promising opportunities in neighborhoods like West Central and Northside, where affordable properties offer strong cash flow potential. Fort Wayne’s low cost of entry, combined with the ability to leverage DSCR (Debt Service Coverage Ratio) loans, allows investors to scale their portfolios effectively, making it an ideal market for long-term rental strategies.
Bloomington, In
Bloomington, IN, offers a vibrant rental investment market, heavily influenced by the presence of Indiana University. With a consistent influx of students, faculty, and university staff, the city provides a reliable tenant pool and strong demand for rental properties. Neighborhoods near campus, such as Elm Heights and Bryan Park, present prime opportunities for single-family and multifamily rentals. Investors can benefit from steady cash flow and premium rents in these areas, particularly by leveraging DSCR loans to scale portfolios. Bloomington’s combination of a stable rental market and a dynamic university-driven economy makes it an attractive option for long-term investment.
Indiana DSCR Loan FAQ’s
How can I Improve the DSCR of my property?
- Increase Your Down Payment. By Increasing your down payment your loan amount will go down and your DSCR will increase. If you’re struggling to improve your DSCR past 1.0, increasing your down payment is an option you may have to consider.
- Ask Your Lender About A Rate Buy Down. Some lenders, including Ridge Street, allow you to pay an additional fee at closing in exchange for a lower rate. In some cases, a rate buydown will allow you lower your DSCR without increasing your overall cash required to close.
- Push For Less Expensive Insurance. Ask your insurance broker if there is anything they can do to lower your policy fee. A lower insurance policy fee will increase your DSCR.
Could I use a DSCR loan if I have to renovate a property?
You can start by getting a short term fix and flip loan to renovate the property and then refinance the property with a DSCR loan. The strategy of buy, rehab, rent, refinance, and repeating is called The BRRRR Strategy.
Can I use a DSCR loan on a Vacation property?
Absolutely! This is one of the main use cases for a DSCR loan.
What loan amounts can I get for a DSCR loan?
Between $50K and $2M. As long as a the DSCR is greater than 1.0, Ridge Street will lend on it.
Are DSCR loans only for investment properties?
Yes. If you are buying a piece of real estate which you intend to live in, then you would not qualify for a DSCR loan.
For refinances and cash outs, does the property have to be rented?
The short answer is no. We understand that investors who fix and refinance properties intend to refinance as soon as possible after renovating a property.
This said, providing a DSCR loan on a rental property that is not rented is higher risk. We'll want to see that the market you are in is very "rentable" at the market rent for your property. We will not provide a DSCR loan on a rental property that has been listed for rent for 3 months with no bites, for example.
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How to Get A DSCR Loan In Indiana with Ridge Street?
Ridge Street is the #1 DSCR Rental Property Lender in Indiana. We pride ourselves on fast closings and fairly priced loans. Get approved for your next project today.
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