With affordable home prices and an impressive rental yield, North Carolina is a prime market for investors looking to generate strong cash flow. But if traditional lenders are slowing you down with income verification roadblocks, you’re missing out on prime opportunities. What if you could secure financing based solely on your property’s rental income?
Many investors I’ve worked with faced challenges getting a traditional loan due to high debt-to-income (DTI) ratios or multiple existing mortgages. I helped them qualify for a mortgage with our DSCR loan.
A Debt Service Coverage Ratio (DSCR) loan allows you to qualify for a rental property mortgage without W-2s, tax returns, or personal income verification. Whether you’re targeting Charlotte’s fast-growing rental market or Raleigh’s steady cash flow properties, a DSCR loan can help you scale your portfolio faster and with fewer restrictions.
Break free from traditional mortgage barriers—apply for a DSCR loan in North Carolina today!
Key Takeaways:
1. DSCR loans qualify investors based on rental income rather than personal finaances such as tax returns, W-2s, or pay stubs.
2. With DSCR loans, investors can secure financing even with multiple mortgages or a high DTI ratio, enabling portfolio expansion.
3.DSCR loans apply to various property types, including short-term rentals, long-term rentals, and multi-family units, while also allowing for cash-out refinancing or financing multiple properties to scale your portfolio.
Table of Contents
What is a DSCR Loan?
A DSCR (Debt Service Coverage Ratio) loan is a real estate investment loan that allows you to qualify based on your property’s rental income rather than personal earnings. Instead of requiring W-2s, tax returns, or pay stubs, lenders assess the rental income-to-mortgage payment ratio to determine eligibility.
For example, I recently worked with a self-employed investor from the UK who wanted to purchase a short-term rental in Raleigh, North Carolina. Since traditional lenders required personal income verification, he faced hurdles securing financing. With HomeAbroad’s DSCR loan, he qualified based on rental income alone. His expected monthly rental income was $12,700, while his mortgage payment was $8,100, giving him a positive cash flow of $4,600 after expenses.
In North Carolina, where cities like Charlotte, Raleigh, and Durham offer strong rental demand and high investment potential, finding the right property can mean owning a rental that pays for itself while generating steady profits. Whether you’re a first-time investor or looking to expand your portfolio, HomeAbroad can help you find and finance the perfect property with a DSCR loan.
How to Calculate Your DSCR Ratio
The Debt Service Coverage Ratio (DSCR) is a crucial metric that lenders use to assess borrowers’ ability to cover mortgage payments with their rental income. For real estate investors, a higher DSCR indicates strong cash flow, which improves your chances of securing better loan terms.
Here’s the formula to calculate your DSCR:
Example
Calculating the DSCR Ratio for a North Carolina Property:
This example reflects positive cash flow, but HomeAbroad Loans specializes in providing DSCR loans tailored to real estate investors, even with low DSCR ratios. While many lenders require a minimum DSCR of 1 and above, we offer flexibility, with loans available for DSCR ratios as low as 0.75.
With “No Ratio DSCR loans” for properties with a DSCR below 0.75, you can secure financing even if your rental income doesn’t fully cover debt obligations. However, this option requires a larger down payment and higher interest rates to mitigate the additional risk.
DSCR Loan Interest Rates
Understanding these rates is crucial for investors as they significantly impact the profitability of investment properties. Before investing, follow our DSCR loan interest rate guide to learn about current DSCR loan interest rates and their influencing factors.
Due to the unique nature of DSCR loans and the associated increased risk for lenders, these rates are typically 1% to 1.5% higher than conventional mortgage rates. For more details on DSCR loans and how they work, visit HomeAbroad’s DSCR loan hub.
How to Qualify for a DSCR Loan in North Carolina
At HomeAbroad, we make qualifying for a DSCR loan simple and flexible, whether you’re a domestic investor or a foreign national. Now, let’s learn about our tailored DSCR loan requirements to provide domestic and foreign investors with flexible financing solutions.
| Features | Domestic Investors | Foreign Investors |
|---|---|---|
| DSCR Ratio | 1 or Higher (No Ratio DSCR Program Available) | >= 1 for best terms, <1 eligible with higher down payment |
| Credit Score | 620 or higher | No US credit history required |
| Down Payment | 20% | 25% |
| Loan-to-Value (LTV) | Up to 80% for purchase/refinance Up to 75% for cash-out refinance | Up to 75% for purchase/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 |
Areas We Lend in North Carolina
- Charlotte
- Raleigh
- Durham
- Greensboro
- Winston-Salem
- Cary
- Fayetteville
- Asheville
- Wilmington
- Concord
- Greenville
- Chapel Hill
- Hickory
- Burlington
- Boone
Let’s evaluate a case study of our past client to understand how profitable investing in the North Carolina real estate market is.
Case Study: Lorenzo, A Self-Employed Investor, Expands His Rental Portfolio in North Carolina
Property Details:
Location: Charlotte, North Carolina
Property Price: $450,000
Monthly Rent: $3,800
Loan Details:
Loan Amount: $350,000
Down Payment: 25%
Monthly PITIA: $2892
DSCR Calculation:
DSCR Ratio = Gross Rental Income ÷ PITIA
DSCR = $3800 / $2892
DSCR = 1.31
How HomeAbroad Helped:
HomeAbroad’s DSCR loan made the process seamless by evaluating Lorenzo’s eligibility based on property income rather than personal tax returns. With flexible loan terms and an interest-only option, she was able to:
- Secure financing without traditional income verification.
- Maintain strong cash flow.
- Minimize upfront expenses and maximize rental profits.
Charlotte’s real estate market is expected to appreciate 30% in the next five years, making it a prime investment opportunity. With a DSCR of 1.31 and a monthly positive cash flow of $908, Lorenzo’s property has a positive cash flow, ensuring a steady return.
Why does This matter?
Steven Glick highlights the importance of this financing approach:
Lorenzo’s challenge was proving income stability as a self-employed investor. With our DSCR loan, we focused on the property’s income potential instead of tax returns. This allowed her to secure financing easily while keeping a strong cash flow. Charlotte’s rental market made this an even smarter investment.
Steven Glick, Director of Mortgage Sales, HomeAbroad
Lorenzo’s success shows how DSCR loans simplify financing, allowing investors to secure profitable properties and maintain strong cash flow. With Charlotte’s market poised for growth, now is the time to leverage a DSCR loan and scale your portfolio.
Top Places to Invest in North Carolina with DSCR Loan
North Carolina offers affordable real estate and attractive rental yields, making it a prime investment market. With an average home price of around $250,000—well below the national average of $355,328—investors can enter the market at a lower cost while still enjoying substantial rental income.
Thanks to renowned universities and thriving industries, Raleigh, Durham, and Charlotte experience steady, long-term demand from students and professionals. Meanwhile, Asheville, Wilmington, and the Outer Banks benefit from robust tourism, driving high short-term rental potential.
With North Carolina’s solid rental yields and access to DSCR loans, investors can secure properties that cover their mortgage and generate positive cash flow.
Here are some of the top investment cities in North Carolina:
City | Rental Type | Rental Yield |
|---|---|---|
Asheville | Short-Term | 10.3% |
Wilmington | Short-Term | 9.4% |
Boone | Short-Term | 11.6% |
Charlotte | Long-Term | 8.6% |
Raleigh | Long-Term | 7.6% |
Need help finding the right investment property? Our AI-driven investment property search platform can help you discover high-performing rentals in North Carolina or anywhere in the US!
Invest in North Carolina with HomeAbroad’s DSCR Loan
HomeAbroad makes real estate investment seamless for US and foreign investors with customized DSCR loan solutions. Whether you’re targeting North Carolina’s thriving markets like Charlotte, Raleigh, or Durham, our flexible loan programs help you invest confidently.
As a one-stop PropTech and FinTech platform, HomeAbroad simplifies US real estate purchases for international buyers. We specialize in foreign national mortgages, overcoming challenges like a lack of US credit history with AI-powered property searches and expert guidance.
With a network of 500+ experienced real estate agents, we provide personalized support in finding the right property. Our comprehensive concierge services further streamline the process, assisting with:
- LLC formation for property ownership
- Opening US bank accounts
- Homeowner’s insurance & property management coordination
- Ongoing investment support
Seize North Carolina’s Real Estate Potential with HomeAbroad
Buy a cash flow-generating property in North Carolina with a DSCR loan that lets the property pay for itself while generating positive cash flow. With our expert-backed DSCR loan solutions and full-service approach, investing in North Carolina’s booming markets has never been easier.
Find and finance your ideal investment property today—apply for a DSCR loan with HomeAbroad!
Pre-qualify for a DSCR Loan in a Few Clicks.
No Paystubs, W2s, or Tax Returns Required.
FAQs
Can foreign nationals apply for DSCR loans in North Carolina?
Foreign nationals can apply for DSCR loans through HomeAbroad Loans without needing a US credit score, making it a flexible financing option for international investors.
How long does it take to get a DSCR loan in North Carolina?
At HomeAbroad Loans, we streamline the application process, ensuring a smooth experience from loan application to closing. We guarantee that the closing will happen within 30 days.
Is cash-out refinancing available for DSCR loans in North Carolina?
HomeAbroad Loans offers cash-out refinancing options for DSCR loans, allowing investors to extract equity from their properties for further investments or renovations.
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: Rental Data
Zillow: Home Prices
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