Conventional giants are flooding the DSCR market with volume, and private lenders say experience is what the big lenders can't replicate
The debt-service coverage ratio (DSCR) loan was once primarily handled by private and non-QM lenders, but Rocket, United Wholesale Mortgage, and a growing list of conventional lenders have now built out DSCR offerings and are putting significant volume into the market.
It is a trend that private and non-QM lenders are keeping a close eye on. The concern is not that large lenders cannot handle DSCR volume, but that the nuances of residential investor lending that specialized lenders have spent years learning are an important part of the process.
While these large conventional lenders are using DSCR products to ramp up overall loan volume, one private lending executive said having years of experience in that loan type is still a critical component for his company.
Ben Fertig (pictured top), founder and president of Constructive Capital, said he has been watching closely as large lenders move into the real estate investor space.
"Rocket's putting DSCR tapes out there. UWM is putting tapes out there," Fertig told Mortgage Professional America. "All of these conventional guys are trying to compete in DSCR, which is making it tough, to be honest. But they're just focused on volume and origination fees. They want to move fast and get the check as fast as they can."
The importance of experience
It’s not just DSCR loans that these big lenders are coming after. A new report from Mortgage Research Network listed the largest real estate investor refi lenders in 2025.
UWM led the way with 7.4% of the market and 14,879 loans completed. Kiavi was second at 3.32% and 6,679 loans. Rocket was third at 2.46% of market share and 4,941 loans. The Loan Store was fourth at 2.29% market share and 4,610 loans, while Constructive Capital was fifth at 2.28% market share and 4,580 loans.
Fertig said these originators who have moved heavily into DSCR are operating from a data-driven secondary market delivery model, checking whether loans fit the parameters and printing them at volume, and the question is whether that approach captures the actual risk.
"These aren't dumb people," he said. "But there's definitely a difference versus how you would assess risk in a typical conventional loan. Inherently, they haven't dealt with concentration risk and some of those things that we have since the beginning of residential investor lending becoming institutionalized."
He said the underwriting considerations that come with investor lending, including concentration risk, market-specific conditions, and the distinction between performing and non-performing local inventory, require accumulated experience that does not transfer automatically from conventional lending.
"They're still kind of coming at it with a broad brush," he said. "At the end of the day, those guys know mortgages. It's just a function of — are the nuances at some point at scale going to be problematic or not? We'll see."
Fertig said the question will be whether these larger lenders are accounting for the risks that private lenders have been identifying. Accounting for some of those risks is one of the reasons why the National Private Lenders Association came up with its watch list to try to identify potential fraudsters.
"We're biased, and we think we've taken all of these remarkable steps to deal with what we've seen as the real risks and what have caused losses and where severities are coming from," he said. "And then you're seeing these big guys come in and just don't even acknowledge any of it. And we're sitting there going like, ‘You just have to wait until it happens.’"
Preparing for what is next
Fertig said Constructive Capital has been using its institutional knowledge and new AI technologies to work through the potential risks involved with residential investor lending.
The company has built out AI agents prompted with transcripts from internal credit escalation meetings, capturing the judgment calls that senior managers have made on edge cases over years of deliberation.
"We've had years' worth of, three times a week, escalation meetings," he said. "Any loans that need escalatory attention come through. We've taken those transcripts — that's our most sophisticated agent profile."
For private lenders, Fertig said the entry of conventional players into DSCR is ultimately something to compete through. The rate competition is real, and so is the expertise gap, and private lending may have one more card to play that conventional lenders cannot match at scale.
"If we can develop an agent to talk to a broker or talk to a borrower, and they can only do it for DSCR, they're not going to do it," he said. "That's because they're just all about scale."
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