No-ratio DSCR loans remove the one number that kills more short-term and mid-term rental files than any other: the coverage ratio. Standard DSCR underwriting divides appraiser market rent by the mortgage payment and wants 1.0–1.25+. When your Airbnb collects double the long-term comp, or your furnished mid-term unit has no 12-month lease to upload, that formula caps your leverage — or declines the file outright. Jaken Finance Group’s no-ratio program funds up to 75% LTV with no minimum DSCR. Credit is reviewed; approval is asset-driven.
This page covers when the ratio is waived, what the leverage and pricing tradeoff looks like against standard DSCR loans, and a worked example showing the dollars. For the 49-second program overview, watch the no-ratio DSCR video post or the clip on the video hub.
When the ratio is waived — and what replaces it
On a standard DSCR file, the appraiser completes a market rent analysis using long-term lease comps. The lender divides that rent by the proposed payment and sizes the loan to hit a minimum ratio. The property qualifies the loan; your tax returns stay in the drawer.
The no-ratio program keeps the 30-year rental structure but drops the coverage test. What replaces it:
- Collateral value — the appraisal still governs; 75% LTV is measured against it
- Exit and income story — trailing STR statements, MTR booking history, or a credible lease-up plan (a lease is optional: provide one if it exists, but its absence does not block the file)
- Borrower profile — liquidity, reserves, and credit trends, reviewed rather than gated by a minimum ratio
The tradeoff is explicit and honest: because the property does not debt-service under market-rent assumptions on paper, the program carries a rate premium over a comparable standard DSCR quote. You are paying for leverage the coverage formula would deny you.
Standard DSCR vs no-ratio DSCR
| Factor | Standard DSCR | No-ratio DSCR |
|---|---|---|
| Minimum DSCR | 1.0–1.25+ on market rent | None |
| Max LTV | Up to 85% purchase / 80% cash-out in select markets | Up to 75% |
| Income documentation | Appraiser market rent; lease often required | Lease optional — actual or program-specific treatment |
| Pricing | Lower tier of the 5.75%–10.5% DSCR range | Rate premium within the same range |
| Term | 30-year fixed or ARM | 30-year fixed or ARM |
| Best fit | LTR with strong market-rent coverage | STR, MTR, sub-1.0 markets, vacant-at-refi |
Note the leverage cost runs both directions. A turnkey long-term rental with a 1.25 DSCR can reach 85% LTV on the standard program — no-ratio would cap it at 75% and charge more. No-ratio is a specialist’s tool, not an upgrade.
When no-ratio makes sense
STR income the appraiser won’t credit. Appraisers benchmark against long-term lease comps and HUD Fair Market Rents-adjacent data, not nightly rates. A furnished vacation rental grossing $4,900/month against a $2,600 market comp is invisible to standard underwriting — see how this plays out corridor by corridor in Orlando STR vs LTR DSCR math and our DSCR loans for short-term rentals hub.
Mid-term rental income. Travel-nurse and corporate stays of 30–180 days command premiums above market rent but rarely produce a 12-month lease. Standard files discount or ignore that income; no-ratio doesn’t need it counted. Full program details on mid-term rental DSCR loans. In license-restricted cities like Chicago, MTR structuring is often the compliant path — see the Chicago shared housing and STR rules guide.
Sub-1.0 markets. High-tax, high-insurance metros can push even fairly bought rentals below 1.0 coverage at today’s payments. No-ratio keeps acquisition and refinance leverage available while rents catch up.
Vacancy and turnover at refinance. A BRRRR property that just finished rehab, or a unit between tenants, has no executed lease the day you need the refi. No-ratio funds without one — pair it with a no-seasoning DSCR cash-out refinance to pull rehab capital back out without waiting on a lease or a seasoning clock.
Worked example: STR purchase at 75% LTV
An investor is buying a furnished short-term rental for $400,000. The appraiser’s market rent analysis comes back at $2,600/month on long-term comps. Trailing-12 STR statements show $4,900/month average collections ($58,800/year). Taxes run $400/month and STR insurance $250/month — $650/month of TI.
Standard DSCR path. At 75% LTV, the $300,000 loan at an illustrative 7.25% fixed carries a P&I of about $2,047/month, so PITIA is roughly $2,697. Coverage on market rent: $2,600 ÷ $2,697 ≈ 0.96 — below 1.0, so the program cuts leverage. At a typical 1.15 minimum, maximum PITIA is $2,600 ÷ 1.15 ≈ $2,261, leaving about $1,611 for P&I — roughly a $236,000 loan, or 59% LTV. The borrower must bring about $164,000 down instead of $100,000.
No-ratio path. The full $300,000 (75% LTV) funds at an illustrative 8.75% — the rate premium — with P&I of about $2,360/month and PITIA near $3,010. Paper DSCR on market rent is 0.86, and the program does not care. Against actual collections of $4,900, real coverage is about 1.63.
The tradeoff in dollars: the borrower keeps $64,000 of extra proceeds ($300,000 vs $236,000) and pays about $313/month more ($2,360 vs $2,047) — roughly $3,760/year for the additional leverage, covered many times over by the STR income the standard formula refused to count. Model your own scenario both ways on the DSCR calculator.
When no-ratio is a bad idea
- The deal loses money on real numbers. No-ratio solves an underwriting methodology problem — market rent understating actual income. It is not a way to finance a property that doesn’t cash flow at all. If actual collections won’t cover the premium-rate payment plus reserves, the answer is a better deal, not a looser ratio.
- Market rent already covers. If the appraiser’s rent supports 1.20+ coverage, standard DSCR prices lower and reaches higher LTV. Paying the no-ratio premium there is burning spread.
- Pro forma optimism with no history. A first STR with zero operating record and aggressive nightly-rate projections gets tighter review and the highest rate tier. Run a season, then refinance.
- Thin reserves. STR and MTR income is seasonal. Entering a premium-rate loan with no cushion for shoulder months compounds risk instead of managing it.
What still gets declined
No minimum ratio does not mean no underwriting. Files fail on: appraised value that doesn’t support the loan at 75%, property condition that isn’t rent-ready, no plausible income story in any format (no statements, no comps, no plan), recent credit events showing active distress, and insufficient liquidity for the payment shock between bookings. Credit is reviewed on every file — the program is asset-driven, not doc-free.
Get a no-ratio quote
Bring the address, purchase price or payoff, actual income history in whatever form exists, and your reserves picture. We underwrite the full file before quoting — half-information produces wrong leverage numbers.
Start your pre-qualification or call (833) 264-7776.
Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. All loans are subject to full underwriting for loan approvals. Jaken Finance Group only finances non-owner occupied investment properties.
Jaken Finance Group, 2300 Barrington Road, Suite 400, Hoffman Estates, IL 60196