Illinois is a prime market for real estate investors, offering strong rental demand and appreciating home values. With a DSCR loan, you can secure financing based on rental income without needing W-2s, tax returns, or pay stubs. This flexible financing option makes it easier to scale your portfolio and maximize returns.
Whether you’re eyeing short-term rentals in Chicago or long-term investments in Naperville, DSCR loans provide a hassle-free way to fund your next property.
Get a DSCR loan in Illinois through HomeAbroad and start your investment journey today!
Table of Contents
Key Takeaways:
➡️DSCR loans simplify the investment process by focusing on the property’s cash flow rather than personal income.
➡️Unlike traditional loans, DSCR loans don’t require income verification, extensive bank statements, or a W-2 form, making them more accessible for investors.
➡️DSCR loans can be used to finance various property types, including short-term rentals, long-term rentals, and multi-family properties.
What is a DSCR Loan?
A Debt service coverage ratio loan, also known as a DSCR loan, is a loan type for real estate investors where the loan approval is based on the property’s ability to generate enough rental income to cover its mortgage payments.
A higher rental income than debt payments increases the chances of securing better loan terms. If a property generates more income than its mortgage expenses, it not only qualifies for a DSCR loan but also has the potential to create positive cash flow for the investor.
How to Calculate the DSCR Ratio?
The Debt-Service Coverage Ratio (DSCR) measures a property’s ability to generate enough rental income to cover its mortgage payments.
DSCR Formula:
A DSCR of 1.25 means the property generates 25% more income than the total debt obligations, demonstrating its ability to cover the monthly payments.
Generally, DSCR lenders look for a minimum DSCR of 1 or higher. However, with HomeAbroad, even properties with a DSCR below 1 can qualify for a loan with a higher down payment. Our tailored solutions ensure you can still achieve your investment goals, even in unique scenarios.
Requirements of DSCR Loan in Illinois
When applying for a DSCR loan in Illinois, understanding the key requirements is crucial for both domestic and global investors. here are the requirements for each:
| Features | Domestic Investors | Global Investors |
|---|---|---|
| DSCR Ratio | 1 or Higher (No Ratio DSCR Program Available) | >= 1 for best terms, <1 eligible with higher down payment |
| Credit Score | Minimum 620 | No US credit needed |
| Down Payment | 20% | 25% |
| LTV Ratio | Up to 80% for Purchase and Rate/Term Refinance, Up to 75% for Cash Out Refinance | Up to 75% for Purchase and Rate/Term Refinance, Up to 70% for Cash Out Refinance |
| Cash Reserves | 2 months | 6 months |
| Property Use | Investment properties (residential and commercial) | Investment properties (residential and commercial) |
| Loan Amount | $75K – $10M | $75K – $10M |
With years of experience working with domestic and global investors, HomeAbroad provides tailored DSCR loans and expert guidance to help investors secure the best financing options in Illinois. We ensure a smooth and efficient investment process from start to finish.
Where We Lend DSCR Loan in Illinois
- Chicago
- Naperville
- Peoria
- Rockford
- Champaign
- Elgin
- Joliet
- Bloomington
- Aurora
- Glenview
- Belleville
- Berwyn
To illustrate how we help investors achieve their goals, let’s look at a real-life example of our client who successfully secured a DSCR loan in Illinois.
Case Study : Investing in Illinois with a DSCR Loan
Henry, a real estate investor, wanted to expand his portfolio by purchasing a rental property in Chicago. With the help of Jason Saylor, an experienced loan officer at HomeAbroad, he seamlessly secured a DSCR Loan that perfectly matched his investment goals.
Property Details
Location: Chicago, Illinois
Property Price: $359,900
Monthly Rent: $3,552
Loan Details
Loan Amount: $269,925
Down Payment: $89,975 (25%)
Loan Term: 30 years fixed
Monthly Mortgage (PITIA): $2,605
DSCR Calculation
DSCR = Gross Rental Income ÷ PITIA
DSCR = $3,552 ÷ $2,605
DSCR = 1.36
With a DSCR of 1.36, the property generated a positive cash flow of $947 monthly after covering all debt obligations. HomeAbroad’s expertise made the financing process seamless, helping Henry secure the right loan for his investment.
With years of experience helping investors secure the right financing, I’ve seen how DSCR loans open doors to smarter real estate investments. By focusing on rental income, investors can scale their portfolios without the usual income hurdles.
Jason Saylor, Sr. Customer Loan Specialist
Top Places to Invest in Illinois with DSCR Loan
Illinois offers strong investment potential, with an average rental yield of 7.8%, making it an excellent market for real estate investors. A DSCR loan helps take advantage of this opportunity by allowing investors to qualify based on rental income, making it easier to secure financing and build a profitable portfolio.
Here are some of the best cities in Illinois for real estate investors using a DSCR loan:
City | Rental Type | Rental Yield |
|---|---|---|
Chicago | Short-Term | 16.6% |
Champaign | Short-Term | 14.3% |
Peoria | Long-Term | 10.7% |
Aurora | Long-Term | 9.3% |
Rockford | Long-Term | 8.9% |
Need help finding the right investment property? Our AI-driven investment property search platform can help you discover high-performing rentals in Louisiana or anywhere in the US!
Get a HomeAbroad DSCR Loan in Illinois
HomeAbroad is a one-stop PropTech and FinTech platform that helps both global and US investors secure tailored DSCR loans with competitive rates and flexible terms to maximize investment returns.
Beyond financing, our AI-driven investment property search and specialized local agents help you find cash-flow-generating properties. We also provide LLC setup, US bank account opening, property management services, and an end-to-end concierge service—everything you need under one roof.
Get a DSCR loan with HomeAbroad today and start growing your real estate portfolio!
Pre-qualify for a DSCR Loan in a Few Clicks.
No Paystubs, W2s, or Tax Returns Required.
Frequently Asked Questions
-
Are DSCR loans hard to get in Illinois?
DSCR loans in Illinois are generally easier to qualify for compared to conventional loans because they focus on the rental income of the property rather than your personal income documents like bank statements, tax returns or credit history.
-
What is the current rate for DSCR loans in Illinois?
DSCR loans in Illinois come with a slightly higher interest rate, usually around 1-2% higher than standard interest rates for traditional mortgages.
You can check the latest DSCR interest rate here.
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What is the maximum DSCR loan amount?
HomeAbroad offers DSCR loans with a maximum amount of up to $10 million, depending on the property’s rental income and eligibility criteria. This allows investors to finance high-value properties with ease.
-
Can I live in a home bought with a DSCR loan?
No! DSCR loans are specifically designed for investment properties and typically do not allow for owner-occupancy. Suppose you are looking to purchase a home to live in. In that case, it is recommended to consider a conventional mortgage or other types of residential home loans that cater to owner-occupancy.
At HomeAbroad, we ensure the reliability of our content by relying on primary sources such as government data, industry reports, firsthand accounts from our network of experts, and interviews with specialists. We also incorporate original research from respected publishers when relevant. Discover more about our commitment to delivering precise and impartial information in our editorial policy.
AirDNA: https://www.airdna.co/vacation-rental-data/app/us/illinois
Zillow: Housing Data – Zillow Research
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