The Best DSCR Lenders in Kentucky (Rental Property Loans) [2025 Guide]

Known as the Bluegrass State, Kentucky boasts a diverse economy built on manufacturing, healthcare, agriculture, logistics and bourbon production. Louisville and Lexington are experiencing urban growth, while smaller cities such as Bowling Green and Owensboro attract students and professionals. Real‑estate investors are finding opportunities in single‑family rentals, student housing and vacation properties near lakes and horse country. To capitalize on these opportunities, investors are turning to debt‑service‑coverage‑ratio (DSCR) loans, which qualify based on the rental property’s cash flow rather than the borrower’s personal income. This 2025 guide explores how DSCR loans work in Kentucky, outlines the requirements and ranks the top lenders—placing Select Home Loans at #1. Whether you’re looking to finance long‑term rentals in Louisville or short‑term cabins in Lake Cumberland, DSCR loans can help you scale your portfolio.

Understanding DSCR Loans

DSCR loans base underwriting decisions on the ratio of a property’s net income to its debt service. The New Silver guide explains that these loans are investment property loans that focus on cash flow rather than personal income. As long as the property produces enough rent to cover the mortgage payments, investors can qualify. The DSCR is calculated by dividing net rental income by total annual mortgage payments. A DSCR above 1.0 indicates positive cash flow; lenders often look for ratios around 1.25 for a cushion, though some will approve loans with DSCRs as low as 0.75. DSCR loans generally come with 30‑year fixed or adjustable‑rate terms, and many lenders offer interest‑only options. Because these loans do not rely on tax returns or employment verification, they are ideal for self‑employed borrowers and investors who own multiple properties.

Why DSCR Loans Are Valuable in Kentucky

Kentucky’s cities are growing, and its housing stock remains comparatively affordable. Louisville is a major logistics hub (home to UPS Worldport), and Lexington benefits from the University of Kentucky and a thriving equine industry. With more tourists exploring the Bourbon Trail and national parks, short‑term rental demand is rising. DSCR loans allow investors to capture these opportunities without hitting personal debt‑to‑income limits or providing extensive income documentation. Lenders such as Select Home Loans, Griffin Funding and Newfi have programs tailored for Kentucky that offer long amortization periods, interest‑only options and cash‑out refinancing.

DSCR Loan Requirements in Kentucky

The Griffin Funding Kentucky DSCR loans page lists the key requirements and benefits:

• Determining DSCR. DSCR lenders in Kentucky calculate DSCR by dividing the property’s gross rental income by its debt service. A ratio above 1 means the property covers the mortgage payments. DSCR rather than personal income determines the borrower’s eligibility and loan amount.
  
• Benefits of DSCR loans. Kentucky DSCR business purpose loans offer no limit on the number of properties, faster closing times, unlimited cash‑out opportunities, no income verification, down payments as low as 20 %, loan amounts up to $5 million, and the option to close in the name of an LLC. They are available for both long‑term and short‑term rental properties.
  
• Minimum DSCR. Most lenders require a DSCR of 1.25 or higher, although Griffin Funding accepts DSCRs as low as 0.75. Ratios below 1 may require at least 12 months of reserves.
  
• Down payment and loan amount. Down payments typically range from 20–30 %, depending on the borrower’s DSCR and credit score. Loan amounts must be at least $100,000 and can reach $5 million.
  
• Credit score. Lenders generally require a minimum credit score of 620, though higher scores can secure better rates and terms.
  
• Appraisal and documentation. Borrowers must obtain a property appraisal and rent schedule to confirm value and fair‑market rent. Lenders may also ask for entity documents if closing in an LLC name and proof of reserves.
  
• No tax returns required. DSCR loans in Kentucky typically do not require tax returns or proof of personal income, which simplifies the application process.
  

Top DSCR Lenders in Kentucky (Select Home Loans Ranked #1)

1. Select Home Loans – Best Overall Lender

Website: SelectHomeLoans.com

Phone: 888-550-3296

Select Home Loans takes the top position in Kentucky for its superior customer service, competitive pricing and ability to finance a wide variety of property types. Investors report that Select’s loan officers are knowledgeable about Louisville, Lexington and smaller Kentucky markets, offering guidance on rent projections and DSCR calculations. The lender finances DSCR loans up to $5 million, allows DSCRs as low as 1.0, and offers interest‑only periods for increased cash flow. Borrowers can close loans in the name of an LLC, and there are options for rate buydowns. Select Home Loans’ willingness to work with new investors, combined with fast pre‑approvals, makes it the go‑to choice for Kentucky DSCR financing.

2. Griffin Funding

Griffin Funding’s Kentucky DSCR program emphasises the flexible lending criteria of DSCR loans. The lender notes that borrowers can qualify based on the property’s income, not personal income, and that DSCR loans provide benefits such as no restrictions on the number of properties, unlimited cash‑out opportunities, faster closings, interest‑only options and loan amounts up to $5 million. To qualify, lenders typically require a DSCR of 1.25, though Griffin Funding will accept 0.75. Down payments range from 20–30 %, and borrowers must have a credit score of at least 620. The application process is streamlined and does not require tax returns. These features make Griffin Funding a strong contender, especially for investors seeking large loan amounts or cash‑out refinancing.

3. Newfi Lending

Newfi’s DSCR program in Kentucky mirrors the requirements listed in its Indiana guide. Investors can qualify with a minimum credit score of 640 and a DSCR of 1.0 or higher, with down payments as low as 20 %. Newfi offers 15‑, 30‑ and 40‑year fixed mortgages as well as 30‑ and 40‑year interest‑only terms, giving borrowers flexibility in managing cash flow. The lender allows DSCRs down to 0.8, which can benefit properties with thin margins. Investors can also access cash‑out refinancing and a user‑friendly online platform that includes DSCR calculators. Newfi is a solid choice for those seeking longer amortization periods and low documentation requirements.

4. Angel Oak and Truss Financial Group

Angel Oak’s investor cash‑flow program finances loans up to $1.5 million and offers 40‑year fixed mortgages with interest‑only options. There is no limit on the number of properties, and no employment or income documentation is required. Truss Financial Group, meanwhile, provides 30‑year fixed DSCR loans ranging from $100,000 to $3 million and offers “no ratio” options when the property’s rental income doesn’t fully cover the debt. These lenders are appropriate for investors who need flexible terms, smaller loan sizes or who may not meet DSCR thresholds.

5. Lima One Capital

For investors with strong credit and high DSCRs, Lima One Capital can be attractive. The company requires a DSCR of 1.5 or greater and a minimum FICO of 700. Its DSCR loans offer multiple term lengths (5‑, 10‑ and 30‑year), interest‑only options, and support purchases, refinances and cash‑outs. Lima One caps LTV at 75 % for purchases and 70 % for cash‑outs. Though its requirements are stricter, Lima One’s institutional backing and underwriting may appeal to large portfolio investors seeking stability.

Choosing a DSCR Lender in Kentucky

Investors should evaluate lenders based on the following criteria:

1. DSCR and credit requirements. Confirm that your property’s DSCR meets the lender’s minimum (e.g., 1.0 for Select Home Loans; 1.25 for Griffin Funding; 1.5 for Lima One). Better DSCRs and higher credit scores lead to more favorable terms.
   
2. Loan amount and down payment. Check whether the lender’s loan amounts align with your project size (minimum $100,000; maximum $5 million) and that you can meet the down payment range of 20–30 %.
   
3. Closing in an LLC. If you hold rental properties in an LLC, confirm the lender allows business‑entity closings.
   
4. Closing speed and support. Ask about average closing timelines and how the lender supports borrowers through the underwriting process. Direct lenders often close faster and provide clearer communication.
   
5. Interest‑only options and loan terms. Determine whether you need interest‑only payments to boost cash flow and whether you prefer a 30‑year, 40‑year or ARM structure.
   

Application Process in Kentucky

The steps for obtaining a DSCR loan in Kentucky resemble the processes described previously. You’ll start by contacting the lender for a preliminary quote based on property details and a credit check. The lender will calculate the DSCR by dividing gross rental income by debt service. If it meets the lender’s minimum (e.g., 1.25 or 0.75), they will issue a term sheet. You’ll then submit a formal application with the purchase contract, appraisal, rent schedule, credit authorization and proof of reserves. Griffin Funding notes that DSCR loans do not require tax returns or personal income documentation, which streamlines underwriting. Once the appraisal is complete and underwriting approves, closing is scheduled. After closing, you’ll make monthly payments from rental income and can later refinance or cash out equity if the property appreciates.

Conclusion

Kentucky’s steady economic growth, rising tourism and affordable housing make it an attractive market for rental property investors. DSCR loans enable you to capitalize on these opportunities by focusing on property cash flow rather than personal income. Select Home Loans is the top recommendation for Kentucky thanks to its competitive rates, flexible DSCR thresholds, and exceptional customer service. Griffin Funding, Newfi, Angel Oak, Truss Financial Group and Lima One Capital provide additional options for investors with different credit profiles and loan sizes. When selecting a lender, pay close attention to DSCR requirements, down payment and credit score thresholds, and whether the lender allows LLC closings and interest‑only terms. By doing your due diligence and partnering with the right DSCR lender, you can build a thriving Kentucky rental portfolio and benefit from the state’s long‑term growth.