Easy Mortgage Qualification for Canada & USA Real Estate Investors: DCR & DSCR Guide

In this episode of the Wisdom Lifestyle Money Show, host Scott Dillingham, President of LendCity Mortgages, dives into strategies for qualifying for investment property mortgages in Canada and the USA without relying solely on personal income. He explains how investors can leverage the property's cash flow through Debt Coverage Ratio (DCR) programs in Canada and Debt Service Coverage Ratio (DSCR) loans in the USA. Drawing from his experience starting in banking and transitioning to specialized investor financing, Scott highlights how these options allow real estate investors to scale their portfolios beyond traditional lender caps, which often limit properties to 4-10. He emphasizes avoiding high-rate private equity loans by choosing lenders who focus on the asset's performance, enabling full-time investing without a 9-to-5 job.

Scott breaks down key differences: In Canada, DCR applies to residential and commercial properties, including single-family homes (though harder) and mixed-use, with up to 80% loan-to-value (LTV) on purchases or refinances. However, a mortgage stress test—qualifying at least 2% above the contract rate or 5.25% (whichever is higher)—makes it tougher, and lenders may scale back LTV if cash flow is insufficient. In the USA, DSCR loans are more lenient with no stress test, interest-only options, and even 40-year terms to boost qualification. LTVs are typically 75% on purchases and 65-75% on cash-out refinances for foreign nationals (like Canadians), with some lenders allowing up to 80% on stabilized properties. He warns against over-relying on BRRRR strategies in the USA due to conservative LTVs for non-residents and notes that mixed-use properties may not qualify under DSCR.

This episode is packed with practical advice for investors aiming to retire from traditional jobs and grow unlimited portfolios, as most DCR/DSCR lenders have minimal caps once debt is sold or switched. Scott stresses running upfront cash flow analyses—including rents, taxes, insurance, and HOA/condo fees—while factoring in Canadian expenses like vacancy and repairs (often using 50-75% of rents). For optimal rates, prioritize positive cash flow; otherwise, expect higher rates or reduced LTVs. Updated for 2025, with USA DSCR booming due to tech-driven closings and Canada maintaining strict stress tests amid stable markets, this guide helps avoid common pitfalls and build wealth through informed lending.