DSCR Loans In Kentucky
Loans close in 21 to 25 days with no personal income documentation required. With experience funding rentals in Lexington, Louisville, and across the state, we offer industry-low rates and a customer experience that’s quick, easy, and reliable from application to closing.
kentucky DSCR Loan Program Overview
Ridge Street Capital is more than just a national lender — we're the lender of choice for Kentucky real estate investors looking for reliable funding. This section is here to give you a transparent overview of our Kentucky DSCR Loan Program and to help you navigate this page to find the informaition you're looking for.
Key highlights:
- Rates as low as 6.0%
- LTV Up to 80% for purchases, Up to 75% for cash outs
- 0% Origination Fee Available
- Quick Funding in as little as 21 days
- Long Term Rentals and Short Term Rentals
To quickly navigate this page, use the following links:
- Rate: 7.0%
- 30 YR (FRM)
- Origination Fee: 0%
- 26 Days to Close
What Is A DSCR Loan?
AA DSCR loan is a non-QM loan program for rental properties where qualification is based on the property's rental income, not the borrower's personal income. Ridge Street measures whether the monthly rent covers the property's principal, interest, taxes, insurance, and association fees (PITIA). The program works for long-term rentals, short-term rentals, and multifamily properties up to 10 units, with no limit on the number of financed properties an investor can hold.
DSCR loans are one of the most popular loan programs for Kentucky real estate investors because they are highly scalable and work well with populuar investing strategies like the BRRRR Method and the Buy and Hold Strategy.
How to Calculate the DSCR for Your Rental?
The equation for calculating DSCR is:
DSCR = Rent / (Principal & Interest + Taxes + Insurance)
Rent = Appraised Long Term Market Rent or Projected Short Term Market Rents from AirDNA
Principal & Interest = Monthly Mortgage Payment
Taxes = Monthly Property Taxes
Insurance = Monthly Property Insurance
Use our DSCR Calculator and DSCR Refinance Calculator to check the debt service coverage ratio of your Kentucky rental property.
DSCR Loan Down Payment Requirements?
When purchasing a property with a DSCR loan, investors are typically required to put down 20% of the purchase price. In addition to the down payment, they must cover closing costs out of pocket. Ridge Street also requires proof of reserves, six months of mortgage payments (PITI), in the investor’s bank account to meet the loan’s liquidity requirements.
See the DSCR Loan Requirements section of this page for detailed breakdown.
As an investor builds their track record, access to fiancing on larger more complex projects is provided:
- Loan amounts up to 75% of After Repair Value
- Projects with at least 20% projected ROI
- An ARV backed by credible sold comps, not inflated listings
DSCR Loan V.S. Conventional Loan?
- DSCR Loans are designed for real estate investors and qualify based on the property’s rental income (Debt Service Coverage Ratio) rather than the borrower’s personal income or tax returns. They offer faster approvals and more flexibility but usually come with higher interest rates (0.5-1.0% higher) and larger down payment requirements.
- Conventional Loans rely on the borrower’s W-2 income and debt-to-income ratio. They often provide lower rates and smaller down payments, but the documentation and qualification process is stricter, making them less investor-friendly.
Long Term Rental V.S. Short Term Rentals?
DSCR loans in Kentucky can finance both long-term rentals (LTRs) and short-term rentals (STRs). For LTRs, the DSCR calculation is based on the appraised market rent. For STRs, it uses projected short-term income from AirDNA (see our guide on Airbnb Loans).
Short-term rentals often generate higher cash flow, while long-term rentals may offer slightly lower rates compared to DSCR loans for Airbnb properties.
For full details, see the DSCR Loan Programs section of this page.
kentucky DSCR Loan Program Details
Kentucky DSCR Loan Program Long Term Rental
Up to 80% LTV for Purchases and Rate & Term Refinances
Up to 75% LTV for Cash Out Refinances
Interest Rates from 6.0% to 7.99%
Origination Fee from 0%
DSCR > 1.0
Loan Size: $50,000 to $2,000,000
Closing in as little as 21 days
Credit Score of 660+ Required
No Experience Required
See Our Complete Guide To DSCR Loans
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Kentucky DSCR Loan Program Short Term Rental
Up to 80% TV for Purchases and Rate & Term Refinances
Up to 75% LTV for Cash Out Refinances
Interest Rates from 6.25% to 7.99%
Origination Fee from 0%
DSCR > 1.0
Closing in as little as 21 days
Loan Size: $125,000 to $2,000,000
Credit Score of 700+ Required
Borrower Required to have 1 Personal Mortgage OR 1 Other Rental Property
See our Airbnb Loans Guide
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Kentucky DSCR Loan Program 5-10 Unit Multifamily
Up to 75% LTV for Purchases and Rate & Term Refinances
Up to 70% LTV for Cash Out Refinances
Interest Rates from 7.0% to 8.25%
Origination Fee from 1.0%
DSCR > 1.15
Closing in as little as 30 days
Loan Size: $350,000 - $2,500,000
Credit Score of 700+ Required
Borrower Required to have 1 Other 5 Unit Multifamily OR 2 Other 2-4 Unit Multifamily OR 3 other Single Family Rentals
Ready For Your Next Rental Property In Kentucky?
Apply NowKentucky DSCR Loan Process
Our DSCR Loan origination process includes 5 steps with reliable funding in 21-25 days.
Apply Or Get Pre-Approved Online
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Receive Your Term Sheet
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Submit Docs & Order Appraisal
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Underwriting And Final Approval
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Closing
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Kentucky DSCR Loan Requirements
This section provides a complete checklist of the Borrower Requirements, Property Requirements, and Documents needed for a DSCR Loan in Kentucky with Ridge Street.
Borrower Requirements
- Credit Score: 660+
- No Mortgage Lates in the last 24 Months
- Liquidity Requirements: Closing Costs + 6 Months PITIA
- First Time Investors Allowed
- Personal Borrower Or LLC
- US Citizen Or Permanent Resident
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Property Requirements
- Property Type: 1-4 Unit Residential or 5-10 Unit Residential
- DSCR > 1.0
- Property Must Be Rent Ready
- Vacant Properties Permitted For Both Purchases and Refinances
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Document Checklist
- Photo ID
- Bank Statement
- Entity Documents (Articles Of Formation, EIN, Operating Agreement) if closing in an LLC
- Appraisal (ordered by Ridge Street)
- Completed Loan Application
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Client Review
Check To See What Terms You Qualify for?
See Your TermsBest Rental Markets in Kentucky for DSCR Loans
Kentucky offers investors affordable acquisition prices across both urban and secondary markets, a landlord-friendly regulatory environment, and an economy driven by healthcare, logistics, automotive manufacturing, and bourbon-related tourism. The state has no rent control, a straightforward eviction process, and property taxes that rank among the lower tiers nationally. Louisville and Lexington are the dominant rental markets and operate on distinct investment profiles, while secondary markets like Bowling Green and Covington offer higher cash-flow potential at lower entry points. For DSCR investors, Kentucky's combination of affordable housing and stable employment in non-cyclical sectors produces qualifying ratios that work across a wide range of property types. In our latest article about Best States To Buy Rental Properties, Kentucky is in our top recommendation.
Louisville
Louisville is Kentucky's largest city and a major logistics and healthcare hub, home to UPS Worldport, Humana, Norton Healthcare, and one of the most active bourbon tourism industries in the world. Rental demand is broad and diversified across the professional, healthcare, and logistics workforce. The Louisville market saw an uptick in new rental supply in 2025 and into 2026, which has moderated competition somewhat and created a more favorable negotiating environment for investors acquiring properties. That supply correction is a short-term dynamic — the underlying demand from Louisville's employment base and population growth remains intact. For DSCR investors, Louisville's lower acquisition prices and stable long-term tenant demand produce solid qualifying ratios.
Lexington
Lexington's rental market has tightened considerably in recent periods, driven by the University of Kentucky's large student and medical school population, the growing Lexington horse country tourism industry, and an expanding healthcare and tech sector. Rental competition in the Lexington market has increased, with fewer available units, faster lease-up times, and higher renewal rates compared to a year ago. The university creates a consistent annual demand cycle that makes Lexington predictable for DSCR underwriting on campus-adjacent properties. Both long-term and short-term rental strategies perform in Lexington, with STR income from horse country and university event tourism supporting AirDNA underwriting on well-located properties.
Frequently Asked Questions
Why should we use Ridge Street for our Kentucky DSCR Loan?
- Investor-Focused Expertise – We specialize in DSCR loans for real estate investors in kentucky, not traditional homebuyers. That means our programs are designed with rental properties and Airbnb's in mind.
- Local Market Knowledge – We understand kentucky market dynamics and structure loans that work for both long-term and short-term rental strategies.
- Speed & Certainty – In competitive Kentucky markets, timing matters. Our streamlined process and fast closings help you win deals before the competition.
- Direct Relationship Lending – Unlike big banks, we provide personalized service and tailored loan terms so you’re not just another file in the system.
- Specialized DSCR program for STR - For STR properties in the Lexington horse country area and the Louisville bourbon tourism corridor, Ridge Street underwrites on AirDNA projected revenue for the DSCR calculation.
Can I close a DSCR Loan in an LLC?
Yes, as long as the LLC is registered in the State of Kentucky, we can fund the deal in the name of your LLC.
Check out our Complete Guide To DSCR Loans.
How do I setup an LLC in Kentucky?
There are several steps involved with setting up an LLC in Kentucky. Typically, the process can take 3-5 days. We recommend Northwest Registered Agent for setting up an LLC in KY.
For DSCR Cash Outs and Refinances, does the property have to be rented?
The short answer is no. We understand that investors who fix and refinance properties intend to refinance as soon as possible after renovating a property.
Can I use a DSCR Loan if I have to renovate the property?
To obtain a DSCR Loan in Kentucky, the property must be in rentable condition. Formally, this means the property must obtain an appraised condition rating of at least C4/C6 with no deffered maintenance.
Do you also offer Fix and Flip Loans in Kentucky?
Yes, you can learn more about our Kentucky Fix and Flip Loans here.
What Closing Costs are involved with DSCR Loan in Kentucky?
Here is a breakdown of the estimated closing costs on a $300,000 DSCR loan in Kentukcy:
- Appraisal Fee → $500 – $700
- Title Search & Title Insurance → $1,000 – $1,500
- Recording Fees & Transfer Taxes → $400 – $800
- Title Agent Fees → $750 – $1,200
- Prepaid Reserves (2 Months of PITI) → $2,000 – $3,000
- Insurance → $1,500-$2,000
What are the Pros and Cons of DSCR Loans?
Pros Of DSCR Loans
- No Personal Income Verification
- No tax returns or W-2s required; approval is based on the property's DSCR.
- Can be used for single-family rentals, multifamily units, condos, and short-term rentals like Airbnb.
- Investors can qualify for multiple properties without debt-to-income (DTI) limitations.
- Cash out refinancing available with DSCR loans making them an ideal choice for investors using the BRRRR Investing Strategy.
Cons Of DSCR Loans
- Higher Interest Rates – Typically 0.5% higher than conventional mortgages.
- Requires 20-25% down, while conventional loans may allow as low as 15% for investment properties.
- Prepayment Penalties – Many DSCR loans include penalties if paid off early, especially within the first 3-5 years.
For more information check out our Complete Guide to DSCR Loan Pros and Cons.
Can I get a DSCR Loan under $100,000 in KY?
Yes. Ridge Street's minimum loan amount is $55,000, with a minimum property value of $75,000. Kentucky's secondary markets including Bowling Green, Owensboro, and Covington have significant investment-grade rental inventory below $100,000 that most national DSCR programs exclude. The $55,000 floor means those deals qualify at the same program terms as the standard offering.
Where can I Learn More about Real Estate Investing in KY?
One of the best ways to get started is by attending local real estate investor (REI) meetups and networking events. Connecting with experienced investors can help you learn market trends, find partners, and source deals.
In Louisville, the KREIA – Kentucky Real Estate Investors Association hosts monthly meetings, workshops, and networking events.
In Lexington, the Bluegrass Real Estate Investors Association (BREIA) offers education, mentoring, and deal opportunities.
For a statewide and national resource, check out BiggerPockets, where you can connect with Kentucky investors, access tools, and read educational articles.
Apply For A DSCR Loan In Kentucky
Whether you have a property under contract, you're looking to be pre-approved so you can find your next deal, or you'd like to speak with an expert, Ridge Street is your DSCR Lender.
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