Calculate DSCR for Refinancing a Rental in Ohio Now

How to Calculate DSCR for Refinancing a Rental Property without a W2: The Ohio Investor’s Playbook

CLEVELAND, OHIO – AUGUST 13, 2025: For real estate investors, especially those with a robust portfolio, traditional mortgage applications can be a frustrating and time-consuming process. The reliance on a W2 or personal tax returns can artificially restrict your borrowing power, especially when you’re reinvesting profits and scaling your business. This is where a DSCR loan refinance for a rental property without a W2 offers a powerful alternative. It’s a strategic financial tool that focuses on the strength of your asset, not your personal income. This guide is tailored specifically for real estate investors in Ohio, helping you understand how to navigate this intelligent financing solution.

Calculate DSCR for Refinancing a Rental Property:

Understanding and Calculating Your DSCR

DSCR stands for Debt Service Coverage Ratio, and it is the metric that lenders use to evaluate the profitability of your rental property. The formula is straightforward and designed to give a clear picture of the property’s ability to cover its own costs.

DSCR = Gross Rental Income / Total Debt Service (PITI)

• Gross Rental Income: For a DSCR loan, lenders often use a professional appraisal or a market rent analysis to determine the property’s potential income. This is a significant advantage over traditional loans, which often only consider the actual rent collected, even if it’s below market value.
• Total Debt Service (PITI): This includes the new loan’s monthly Principal & Interest payment, plus the monthly prorated amounts for Taxes and Insurance.

A DSCR of 1.0 means the property’s income is exactly enough to cover its debt. For a refinance, lenders typically look for a DSCR of 1.20 or higher, which indicates the property generates 20% more income than is needed to cover its expenses. A higher DSCR can lead to more favorable terms, including a lower interest rate.

Current DSCR Loan Rates and Requirements (as of August 13, 2025)

The real estate market is constantly in motion, and staying informed is key. As of today, DSCR loan rates for rental property refinancing are generally ranging from 7.00% to 8.50%. However, your specific rate is influenced by several critical factors:

• Loan-to-Value (LTV): The lower your LTV (the amount you’re borrowing compared to the property’s value), the more favorable your rate will be. Lenders see more equity as less risk.
• Credit Score: While a W2 isn’t required, your credit score is still an important indicator. Borrowers with scores of 720 or higher will typically qualify for the best rates.
• DSCR Ratio: As mentioned, a higher DSCR ratio demonstrates a stronger, more profitable asset, and lenders often reward this with better pricing.
• Property Type: The type and condition of your property also play a role. A well-maintained single-family home or a duplex in a desirable area will be more attractive to a lender than a property in need of significant repairs.

Key Requirements: The beauty of DSCR loans is their simplicity for the seasoned investor. You can expect the following:

• No Personal Income Check: Lenders do not require personal tax returns, W2s, or pay stubs.
• Entity Lending: The loan is typically made to an LLC, corporation, or other business entity, which is a common practice for portfolio investors seeking liability protection.
• Flexible Property Types: This financing can be applied to a wide range of rental properties, including single-family homes, multi-family properties (up to 4 units), and even some small commercial properties.

Quiz on Ohio Rental Property Laws

This quiz will test your knowledge of the essential laws and regulations for owning and managing an Ohio rental property. Understanding these rules is crucial for protecting your investment and ensuring a smooth tenancy.

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Page 1 of 5

What is the maximum amount of a security deposit a landlord can legally charge for an Ohio rental property? A) The maximum security deposit is two months' rent, which is the legal limit for an Ohio rental property. B) There is no legal limit on the security deposit amount. C) The maximum security deposit is one month's rent. D) The amount of the security deposit is based on the tenant's credit score, with a higher score leading to a lower deposit.

Page 2 of 5

How long does a landlord have to return a security deposit after a tenant moves out of an Ohio rental property? A) A landlord must return the security deposit within 30 days of the tenant vacating the Ohio rental property, or provide a written, itemized list of deductions. B) A landlord has 60 days to return the deposit. C) A landlord has 15 days to return the deposit. D) A landlord can hold the deposit for as long as they need to assess damages.

Page 3 of 5

What is a key requirement for a landlord's entry into an Ohio rental property? A) Landlords can enter at any time without notice. B) Landlords must provide at least 24 hours' notice before entering, except in an emergency. This is a key legal requirement for an Ohio rental property. C) Landlords must provide at least 48 hours' notice for entry. D) Landlords can only enter the property with the tenant's explicit, written permission for each visit.

Page 4 of 5

What is the legal process for evicting a tenant from an Ohio rental property for non-payment of rent? A) The landlord can change the locks immediately after rent is late. B) The landlord must provide the tenant with a three-day notice to pay rent or vacate the premises before filing for eviction, which is the official legal procedure for an Ohio rental property. C) The landlord must give 30 days' notice before filing for eviction. D) The landlord can shut off the utilities to force the tenant to move out.

Page 5 of 5

What is a landlord's duty to maintain an Ohio rental property? A) The landlord's duty is limited to ensuring the property is structurally sound. B) A landlord is required to maintain the property to be "habitable" and in compliance with all housing codes, a key legal obligation for an Ohio rental property. C) The landlord is not responsible for any repairs, which are the tenant's responsibility. D) The landlord's only duty is to ensure the tenant has access to water and electricity.

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GHC Funding: Your Ohio-Focused Lending Partner

Ohio’s real estate market offers unique opportunities, from the diverse urban economies of Cleveland and Columbus to the steady, industrial markets of Cincinnati and Dayton. Navigating these markets requires a lender with both national expertise and local insight. GHC Funding is that partner.

Consider a multi-family property you own in the German Village neighborhood of Columbus (Zip Code 43206) or a single-family rental in the booming Short North Arts District (Zip Code 43215). With a DSCR loan from GHC Funding, you could refinance to pull cash out and invest in a new opportunity, such as a rental property in the revitalized Flats East Bank area of Cleveland (44113) or a student housing property near Ohio State University.

GHC Funding provides a full spectrum of financing solutions for real estate investors, including DSCR Loans, SBA 7a loans, SBA 504 Loans, Bridge Loans, and Alternative Real Estate Financing. Their flexible underwriting and deep market knowledge make them the ideal choice for Ohio investors seeking a streamlined, efficient path to portfolio expansion. Visit www.ghcfunding.com to learn more.

Frequently Asked Questions about DSCR Refinancing

• Q1: What is the primary difference between a DSCR loan and a traditional mortgage?The main difference is the underwriting process. A DSCR loan underwrites the loan based on the property’s income, while a traditional mortgage relies on the borrower’s personal income and debt-to-income (DTI) ratio.
• Q2: Can I use a DSCR loan to refinance a property I’ve just purchased and renovated?Yes, this is a popular strategy. If the renovations have increased the property’s value and potential rental income, a DSCR refinance can be used to pull out your initial investment and even some of the rehab costs.
• Q3: What if my rental income is slightly below the required DSCR?Some lenders offer programs with slightly lower DSCR requirements, but it may come with a higher interest rate or require a larger down payment. It’s best to discuss your specific situation with a lender.
• Q4: Do DSCR loans have prepayment penalties?Many DSCR loans do have a prepayment penalty, typically for the first 1-5 years. Be sure to clarify this with your lender so it aligns with your long-term investment strategy.
• Q5: Is a DSCR loan a good option for an investor with multiple properties?Absolutely. Because it doesn’t rely on your personal DTI, a DSCR loan allows you to scale your portfolio without the constraint of having too many personal mortgages on your credit report.
• Q6: What documents do I need for a DSCR loan if I don’t have a W2?You will typically need documents related to the property itself (appraisal, rent survey), your business entity documents, and a credit report. Lenders are more concerned with the asset’s performance than your personal tax returns.
• Q7: Can a DSCR loan be used for a property with a long-term lease?Yes, DSCR loans are perfect for properties with long-term leases, as the stable income stream makes for a very strong DSCR.

Helpful Resources for Ohio Real Estate Investors

To succeed in the Ohio market, it’s vital to have access to reliable local data and networking opportunities. Here are some resources to support your investment journey:

• Ohio Real Estate Investors Association (OREIA): A state-wide resource for networking, education, and legislative updates for investors.
• Ohio Division of Real Estate & Professional Licensing: The official state agency for real estate regulations, licensing, and consumer protection.
• Ohio Housing Finance Agency (OHFA) Housing Data Insights: Provides data and analysis on the state’s housing market to inform and assist investors.
• Real Estate Investors Association of Greater Cincinnati: A local community for real estate entrepreneurs in the Cincinnati area.

Take the Next Step in Your Investing Career

Refinancing with a DSCR loan is a strategic move that can dramatically accelerate your growth as an investor. If you are ready to leverage the power of your assets and free yourself from the limitations of traditional lending, it’s time to act.

Visit www.ghcfunding.com to explore your financing options, or call GHC Funding at 833-572-4327 to speak with a specialist who understands the unique needs of Ohio real estate investors.

Take the Next Step in Your Investing Career

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At GHC Funding, we are commercial finance specialists who guide real estate investors and business owners through the world of alternative lending. Our primary focus is on securing the right capital for your specific goals, whether that's a cash-flow-based DSCR loan for your rental portfolio, an SBA loan to grow your company, or a bridge loan to close a deal quickly and efficiently.

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