Fix & Flip vs. DSCR Loans: Which Is Right for the Deal?

February 2, 2026 6 min read

Fix & flip loans: built for the exit

Fix & flip loans are short-term (usually 6–18 months) and cover both purchase and rehab. They're underwritten to the after-repair value (ARV) because the plan is to renovate and sell — the loan is repaid at the sale or refinance.

DSCR loans: built for the hold

DSCR (Debt Service Coverage Ratio) loans finance rental properties based on the income the property produces, not the borrower's personal income. They're ideal for buy-and-hold investors scaling a portfolio without traditional income docs.

Quick decision guide

If the investor plans to renovate and sell, point them to a fix & flip loan. If they plan to keep the property and rent it out, a DSCR loan is usually the better fit. Many investors use both across a portfolio.

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