DSCR Loans for Foreign Nationals: US Real Estate Guide

Want to buy rental properties in the US but you’re not an American citizen? You’re in luck. DSCR loans make it possible for Canadians, UK residents, and investors from almost any country to finance US investment properties without the usual headaches of proving income or dealing with credit score requirements.

Here’s what you need to know about how this actually works.

What Makes DSCR Loans Different

A DSCR loan (Debt Service Coverage Ratio loan) works completely differently than a regular mortgage. Instead of digging through your tax returns and employment history, lenders focus on one thing: can the property’s rental income cover the mortgage payment?

This is huge for foreign nationals because it means:

• Your personal income doesn’t matter
• Your credit score from your home country rarely comes into play
• You don’t need to prove employment
• The property itself does the heavy lifting

DSCR loans work for properties with eight units or less. Once you get into larger commercial properties, different products become available, but for most investors starting out, DSCR is your go-to option.

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Who Can Actually Get These Loans

Good news: DSCR loans are available to investors from virtually any country, with one exception. You can’t be from a country under US sanctions. That’s it.

If you’re from a non-Hague Convention country, you might need to visit a US embassy for notarization, but the financing itself is still available. The doors are wide open for international investors.

The Numbers You Need to Know

For Purchases

Expect to put down 25% (75% loan-to-value) on properties worth $150,000 or more. This is the sweet spot where you’ll get the best terms and widest range of lender options.

Below $150,000, things get trickier. You’ll need 30% down, face higher interest rates, pay more in origination fees, and deal with stricter cash reserve requirements. If you can, stick with properties above that threshold.

For Refinances

Here’s where it gets interesting. Maximum loan-to-value on refinances drops to 70%, and most lenders only go up to 65%. This surprises a lot of investors who assume they can pull out more equity.

Even more important: some lenders base your refinance on the appraised value, while others use your cost basis (what you paid for it). If you bought a property for $200,000 and it appraises at $250,000, some lenders will only let you refinance based on that $200,000 purchase price. This can seriously limit how much cash you can pull out.

Interest Rates and Pricing Reality Check

Let’s be straight about rates. If you’ve read online that you can get 80% financing at 6% as a foreign national, that information is wrong. As of early 2025, rates sit in the 7-8% range for DSCR loans.

But here’s the thing about DSCR loan pricing: it’s property-specific, not borrower-specific. Unlike getting pre-approved for a conventional mortgage where your rate applies to any property you buy, each DSCR property generates its own unique rate.

Real example: Two condos in the same Florida complex, just across the street from each other. Different ZIP codes. One was a quarter-point higher in interest because it sat in a slightly higher flood risk zone.

This means you should have your broker price each specific property before making an offer. Don’t assume the rate will be the same as your last deal.

The Credit Score Myth

Here’s something that surprises almost everyone: your Canadian or UK credit score probably won’t impact your US loan terms. In 99 out of 100 cases, foreign credit scores aren’t even considered.

This is actually great news if you’re self-employed, take lots of tax deductions, or have limited credit history in your home country. DSCR loans bypass all these traditional barriers because they focus solely on the property’s income potential.

Where You Sign Matters

This is a detail that affects your interest rate. You have two options:

Sign on US soil: Generally results in lower rates

Remote Online Notary (RON): Sign from anywhere in the world, but expect to pay about 0.125% more in interest

Real example: A client in Ottawa (an hour from the US border) could get 7% by signing in the US or 7.125% signing remotely. For him, driving across the border made sense. For someone in London or Sydney, paying the small rate premium for remote signing is probably worth it.

The 60-Day Money Rule

Lenders want to see where your down payment came from, going back 60 days. But here’s the catch: some lenders require these funds to be “seasoned” in a US bank account, while others accept funds coming directly from your home country.

Why does this matter? If you find a great deal requiring a 30-day closing, but your funds are in Canada and the lender requires 60 days of US seasoning, you either can’t buy that property or need to negotiate an extension with the seller.

This is why working with a broker who knows each lender’s specific requirements saves you from deal-killing surprises.

Prepayment Penalties Vary by State

Loan terms change based on where you’re buying. A property in Cleveland might have a higher rate but no prepayment penalty, while a comparable property in Kansas City offers a lower rate with a five-year step-down prepayment penalty.

The right choice depends on your plans. If you think you might refinance in two years when rates drop, paying slightly more for flexibility makes sense. If you plan to hold long-term, locking in the lower rate works better.

Why US Fixed Rates Are Amazing

If you’re from Canada or the UK, the concept of a 30-year fixed-rate mortgage might seem almost too good to be true. In Canada, mortgage rates nearly tripled in recent years, causing massive payment shock at renewal time. In the UK, most mortgages are variable rate products.

With a US 30-year fixed rate at 7%, you’re locked in. If rates climb to 12%, you keep paying 7%. If you start with $200-300 monthly cash flow, this expands over time as rents increase while your mortgage payment stays exactly the same.

You can even get 40-year Amortization options if you need better cash flow numbers to make a deal work.

The Smart Refinance Strategy

If you’re planning to renovate and refinance (the BRRRR strategy), there’s a smarter way to do it than starting with a standard DSCR loan.

Use a fix-and-flip loan for your initial purchase:

• Down payment as low as 10-30% of purchase price
• 100% financing of renovation costs
• Interest rates around 8.99% (as of early 2025) for experienced investors

After renovations, do a “transfer” to a DSCR loan instead of a traditional refinance. Transfer loans can go up to 75% loan-to-value (higher than standard refinances), and you can capitalize lender fees and closing costs into the loan amount.

This strategy lets you put less money in upfront and extract more capital on the backend. With demonstrated experience (think 60+ completed deals), you can qualify for even better terms: 87.5-90% financing on purchases and better interest rates.

What Lenders Actually Need From You

DSCR lenders don’t want your tax returns, employment verification, or personal financial statements. They do need:

• Property title documentation
• Rental agreements or rent roll
• Property management agreement
• Insurance quote
• Property Appraisal (they order this)
• 60 days proof of down payment funds
• Entity documentation (LLC or LP paperwork)
• EIN (tax ID number) for your entity

Timeline-wise, expect 30 days from application to closing. The fastest DSCR loan on record closed in 11 days, but that’s cutting it close. Allow 3-4 weeks so you have time to shop among multiple lenders for the best terms.

Entity Structure: Don’t Skip This Step

Always buy through an entity, never in your personal name. Here’s why this matters:

If a tenant’s unauthorized dog bites someone and they sue you, owning through an entity limits your exposure to just the assets in that entity. Own personally, and all your global assets are at risk.

For Canadians specifically, don’t just set up a simple LLC. The Canada Revenue Agency might treat it as a corporation, creating double taxation (once in the US, again in Canada).

The better structure for most Canadians:

• An LP (Limited Partnership) domiciled in the US
• An LLC that serves as the manager of the LP
• This is typically treated as pass-through by both the CRA and IRS

That said, there’s no one-size-fits-all solution. Your ideal structure depends on your specific tax situation, long-term goals, and estate planning needs. Don’t get your investment advice from TikTok or random internet forums. Talk to professionals who understand both US and your home country’s tax systems.

The EIN Problem and Solution

You need an EIN (Employer Identification Number) to close on a US property. Standard IRS processing takes up to 8 weeks for foreign nationals. Both your lender and the title company need this number, and you can’t close without it.

The solution: Work with a service that can get your EIN immediately (same day) with a proper letter in your name. If you try to do this yourself through standard IRS channels, start well in advance of needing to close on a property. Otherwise you’ll find a great deal but lack the paperwork to complete the purchase.

Don’t Use Your Bank for Wire Transfers

Many investors default to using their bank for wire transfers and foreign exchange. This is a costly mistake.

Specialized foreign exchange companies offer better exchange rates and lower fees. These services can save thousands of dollars on down payments. It’s free money you’re leaving on the table by not shopping around.

Work With Someone Who Knows This Stuff

US-based brokers who typically work with American clients often don’t understand the nuances of foreign national lending. They miss critical details about down payment seasoning requirements, entity structure implications, and property-specific pricing variations.

You need someone who specializes in helping foreign nationals finance US investment properties. Someone who knows which lenders accept remote signing, which require US seasoning of funds, and how to structure deals for maximum leverage.

The difference between working with a specialist and a generalist can mean the difference between closing your deal or watching it fall apart over a detail no one thought to check.

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Frequently Asked Questions

Written by

LendCity

Published

December 22, 2025

Tags

Dscr Loans Cross Border Us Investing Cash Flow Mortgage Basics

Key Terms in This Article

Amortization

Amortization

The period over which a mortgage is scheduled to be fully paid off through regular payments of principal and interest. In Canada, common amortization periods are 25 or 30 years, though the mortgage term (when you renegotiate) is typically 1-5 years.

Appraisal

Appraisal

A professional assessment of a property's market value, required by lenders to ensure the property is worth the loan amount.

BRRRR

BRRRR

Buy, Rehab, Rent, Refinance, Repeat - a real estate investment strategy where you purchase a property below market value, renovate it to increase value, rent it out, refinance to pull out your initial investment, and repeat the process with the recovered capital.

Cash Flow

Cash Flow

The money left over after collecting rent and paying all expenses including mortgage, taxes, insurance, maintenance, and property management.

Closing Costs

Closing Costs

Fees paid when completing a real estate transaction, including legal fees, land transfer tax, title insurance, appraisals, and adjustments.

Conventional Mortgage

Conventional Mortgage

A mortgage with 20% or more down payment, not requiring default insurance. This is the standard financing type for investment properties in Canada, as high-ratio (insured) mortgages aren't available for pure rentals.

Credit Score

Credit Score

A numerical rating (300-900 in Canada) that represents your creditworthiness, affecting mortgage rates and approval. 680+ is typically needed for best rates.

DSCR

DSCR

Debt Service Coverage Ratio - a metric that compares a property's net operating income to its mortgage payments. A DSCR of 1.25 means the property generates 25% more income than needed to cover the debt. Lenders typically require a minimum DSCR of 1.0 to 1.25 for investment property loans.

Underwriting

Underwriting

The process lenders use to evaluate the risk of a mortgage application, including reviewing credit, income, assets, and property value to determine loan approval.

Vacancy Rate

Vacancy Rate

The percentage of rental units that are unoccupied over a given period. A critical factor in cash flow analysis, typically estimated at 4-8% for conservative projections.

Hover over terms to see definitions, or visit our glossary for the full list.

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