How to…

Updated on December 20, 2024

How to Get DSCR Loan as a Canadian? [2025]

Canadian investors looking to expand into the US real estate market can take advantage of DSCR (Debt Service Coverage Ratio) loans. These loans focus on a property’s rental income, rather than a borrower’s personal income, making them an ideal financing…

Written by Amresh Singh

Founder & CEO of HomeAbroad

How to Get DSCR Loan as a Canadian? [2025]

Making informed real estate decisions starts with having the right knowledge. At HomeAbroad, we offer US mortgage products for foreign nationals & investors and have a network of 500+ expert HomeAbroad real estate agents to provide the expertise you need. Our content is written by licensed mortgage experts and seasoned real estate agents who share insights from their experience, helping thousands like you. Our strict editorial process ensures you receive reliable and accurate information.

Key Takeaways:  

➡️ DSCR loans focus on rental income, allowing Canadian investors to qualify without a US credit history.  

➡️  HomeAbroad Loans offers tailored DSCR loan solutions for Canadians, simplifying cross-border financing.  

➡️ Popular states for Canadian investment include Florida, Arizona, and Hawaii due to strong rental property markets.

According to the National Association of Realtors (NAR), Canadian investors made up 13% of foreign buyer transactions in the US between April 2023 and March 2024, with purchases totaling $5.9 billion.

They also had the second-highest average purchase price at $834,000. With significant investment in US real estate, Canadian investors must understand financing options like DSCR loans that can help them achieve their property investment goals.

In this article, we’ll cover everything you need to know about DSCR loans, top US markets, and the key benefits for Canadian investors.

What is a DSCR Loan and How is it Calculated?

A DSCR (Debt Service Coverage Ratio) loan is a financing option designed specifically for real estate investors.

Unlike traditional loans, qualification for a DSCR loan is based on the property’s income rather than the borrower’s personal income or credit score. This approach is especially beneficial for foreign investors, such as Canadians, who may not have an established US credit history.

DSCR loans focus on the cash flow a property can generate, making it possible for investors to qualify based solely on rental income. HomeAbroad’s DSCR Loan guide helps you understand DSCR loans in more detail.

Why Are DSCR Loans Ideal for Canadian Investors?

✅ No US Credit Score Needed

Canadian investors can qualify for DSCR Loans based solely on the rental income of the property, bypassing the need for a US credit history, which is often a hurdle with traditional mortgages.

✅ Streamlined Cross-Border Financing

HomeAbroad’s DSCR Loans simplify cross-border financing by focusing entirely on a property’s rental income. This removes the need for extensive documentation or proof of personal income, which is typically required by traditional lenders.

At the recent Keyspire Investor Summit, many Canadian investors shared concerns about the complexities of cross-border financing, such as differences in tax systems and regulatory frameworks.

DSCR Loans solve these challenges by offering a straightforward, hassle-free qualification process tailored for Canadian buyers.

✅ Flexible Qualification Criteria

DSCR Loans prioritize the property’s cash flow over the borrower’s personal financials. This flexibility allows Canadian investors to qualify for loans without needing to provide detailed income verification or asset documentation.

✅ Streamlined Process for Retired Snowbirds

Retired Canadian investors can easily qualify without active income or a US credit score, making DSCR Loans a perfect fit for snowbirds looking to invest in vacation hotspots.

Why Choose DSCR Loans Over Canadian Mortgages for US Properties?

Traditional Canadian lenders offering US mortgages impose stricter requirements, such as higher down payments, extensive documentation, and reliance on personal financials.

HomeAbroad Loans’ DSCR Loans, however, are tailored for Canadian investors, offering a more efficient solution.

Here’s how HomeAbroad’s DSCR Loans differ from Canadian Mortgages from Canadian lenders:

Feature	Canadian Mortgages from Canadian Banks	US Mortgages for Canadians (DSCR Loans)
Loan Term	Begins with an initial term of 3, 5, 7, or 10 years, with ARMs	Typically, 30 years or based on specific loan product, with Fixed Rate and ARMs available
Interest Rates	Higher than domestic Canadian rates	Competitive rates; only 25-50bps higher than for US citizens
Down Payment Requirement	20% or higher	25%
Documentation Required	Extensive proof of income, assets, and credit history	Streamlined; only property’s income is needed, not personal income
Processing Time	Longer, due to cross-border considerations	Quick approvals, often within 30 days
Closing Process	May require travel to the US	Remote closing available

How HomeAbroad’s DSCR Loan differs from mortgages from Canadian lenders

Let us see how a Canadian couple succeeded in acquiring a property in Hawaii with HomeAbroad Loans’ DSCR Loans:

Case Study: How One Canadian Couple Acquired a Profitable Rental Property in Hawaii with a DSCR Loan

One notable HomeAbroad success story features a Canadian couple who utilized a DSCR loan to purchase a rental property in Hawaii’s competitive real estate market.

Here’s how it unfolded:

Check the entire analysis of our Canadian couple who was able to acquire a rental property in Hawaii using HomeAbroad's DSCR Loans.

Investor: Liam and Emma Thompson

Property Details: 

Location: Lahaina, Hawaii
Property Type: Single-family home suitable for short-term rentals
Purchase Price: $1,550,000

Financing Details: 

Loan Amount: $1,085,000
Down Payment: $465,000 (approximately 30% of the purchase price)
Interest Rate: 7.375% fixed
Loan Term: 30 years
Monthly Mortgage Payment: $9,282

Challenges Overcome: 

✔️ Lack of US Credit History: Traditional US mortgages often require a US credit score, which the Thompsons did not have.
✔️ Canadian Mortgage Limitations: Canadian banks offered mortgages for US properties but with restrictive terms, such as shorter loan durations leading to higher monthly payments, affecting their debt-to-income ratio.

Solution: HomeAbroad’s DSCR loan program enabled the Thompsons to qualify for financing based on the property’s projected rental income rather than their personal income or US credit history. This approach provided a more flexible and accessible financing option tailored for foreign investors.

Outcome: The Thompsons successfully acquired their dream vacation home, which they now use for family vacations and as a profitable short-term rental property. The DSCR loan facilitated a seamless entry into the US real estate market, turning their vision into reality.

This successful case, shared during the Manifest & Invest summit, exemplifies how Canadian investors can leverage DSCR loans to secure high-yield properties in the US without facing extensive credit or income barriers.

You can read the complete details of this case here.

Why Are DSCR Loans the Ideal Option for Retired Canadian Snowbirds?

Retired Canadian snowbirds often struggle to qualify for traditional loans due to a lack of active income. With DSCR Loans, HomeAbroad eliminates this barrier by focusing solely on rental income.

Here’s why DSCR Loans are a perfect fit for retired investors:

✔️ No Income Verification: Snowbirds can qualify without personal income, relying only on the property’s rental income.

✔️ Vacation Hotspot Opportunities: Invest in high-demand markets like Florida, Arizona, and Hawaii, where rental income is robust.

✔️ Simplified Approval Process: Avoid the complexities of proving income and financial assets with streamlined qualification.

You can get more information on DSCR loans with the help of our guide.

Key Factors to Consider When Applying for a DSCR Loan

Now that you understand the benefits of DSCR loans, here are some critical factors to keep in mind when preparing your application:

✔️ Down Payment: For Canadian investors, HomeAbroad typically requires a 25% down payment. Ensure you have sufficient funds to qualify for a DSCR loan.

✔️ Gross Rental Income: DSCR loans base eligibility on the property’s gross rental income, so investors should choose properties with strong income potential.

✔️ Loan-to-Value Ratio (LTV): HomeAbroad offers competitive LTV ratios, usually up to 75%, meaning investors can borrow up to 75% of the property’s value.

Now that we’ve covered the key factors, let’s take a closer look at the application process for securing a DSCR loan through HomeAbroad.

How to Apply for a DSCR Loan with HomeAbroad

Applying for a DSCR loan with HomeAbroad is straightforward. Canadian investors can start the loan application process online, where they’ll be guided through each step.

The basic steps include:

️️️1️⃣ Start the Application Online: Begin by filling out the online form to initiate the process.

2️⃣ Submit Property Details: Provide information about the rental property, including income projections.

3️⃣ Receive Pre-Approval: HomeAbroad reviews the property’s income potential and offers pre-approval based on DSCR metrics.

4️⃣ Finalize Financing: Upon final approval, investors can close on the property, with remote closing options available for convenience.

Want to get a detailed picture of the application process? Check out our guide to understand DSCR Loan application process in our foreign national mortgage guide.

Conclusion

DSCR loans provide an excellent opportunity for Canadian investors to enter the US real estate market without the need for a US credit score or detailed income verification. HomeAbroad offers tailored DSCR loan solutions, making the process seamless for Canadian investors looking to build their investment portfolios in the US.

Whether it’s a rental property in Florida or a multifamily unit in Arizona, Canadian investors can leverage DSCR loans to secure profitable real estate investments.

FAQs

1. Do Canadian investors need a US credit score for a DSCR loan?

No, Canadian investors do not need a US credit score. They qualify for DSCR loans based on the rental income of the property.

2. What is the typical down payment for Canadian investors?

HomeAbroad requires a 25% down payment for Canadian investors seeking DSCR loans.

3. Can DSCR loans be used for commercial properties?

Yes, DSCR loans are suitable for both commercial and multifamily properties, provided the rental income meets the loan’s DSCR requirements.

4. What are the top states for Canadian investors?

Florida is the leading state, followed by Arizona, Hawaii, California, and New York, all of which offer favorable real estate markets for rental properties.

Amresh Singh, Founder & CEO of HomeAbroad

About the author:

Amresh is the Founder & CEO of HomeAbroad. With over 14 years of mortgage industry experience, he specializes in foreign national mortgages and Non-QM mortgages. He is also a licensed mortgage originator (NMLS # 2549148).