DSCR Investment Property Loans

Debt Service Coverage Ratio (DSCR) is a financial calculation used by lenders to evaluate the cash flow on a property. The Monthly Rent MINUS the payment of the property is the calculation. The difference is your profit (or loss).

Simply put I will qualify you based on the potential rental income of the investment property and NOT your personal income. This is for the purchase or refinance of RENTAL (investment) properties only. No owner occupied on this program.

A high DSCR score (>1.0) indicates that the property has sufficient cash flow to cover the payment, while a low DSCR score (<1.0) indicates that the rental income will not cover the payment.

DSCR is particularly important for business purpose loans and investor cash flow loans, where lenders prefer that the property generates enough cash flow to cover loan payments. DSCR loans are still possible on negative cash flow properties but the interest rate may be higher.

Mortgage loans with no personal income required are becoming more common in the real estate industry. These loans are designed for investors who want to purchase a property for rental purposes, but don’t want to use their personal income to qualify for the loan. Instead, the lender uses the property’s cash flow to determine whether the borrower qualifies for the loan.

Whether you are looking for business purpose loans, investor cash flow loans, or mortgage loans with no personal income required, a high DSCR is preferred. By ensuring that your property generates enough cash flow to cover loan payments, you can increase your chances of getting approved for a loan and securing the financing you need to grow your real estate portfolio.

20% down with 640 score. Lower scores allowed with more down payment.

 Short-term (airbnb, vrbo style) rentals are allowed.

6-months of the payment as “reserves” is usually required to be in your bank or retirement at close of escrow. Reserves are not always required if down payment is 25% or more.

Interest Only is available, Cash out refis are also available, Closing in an LLC is OK.

Full Interior / Exterior appraisal required. Appraisal Transfers from other Lenders is allowed under certain circumstances.

Property Types: SFR / Condos / Townhouse / 2-8 Units / Non-Warrantable Condos / Condotels (25% down on Condotels)

Eligible Borrowers: U.S. citizens • Permanent resident aliens • Non-Permanent Resident Alien • Foreign Nationals

Housing History – A 12-month good pay housing history is required for borrower(s)’ primary residence, unless the primary residence is owned free and clear.

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