30-YEAR DSCR RENTAL LOANS

The main benefit of a DSCR loan is that it is based on borrower credit and property cash flow, not the borrower’s personal income. DSCR loans are considered to be “low-doc” loans in comparison to conventional loans which require more documentation in order to proceed with the loan.

A conventional loan is often difficult for Real Estate Investors to achieve as they require specific guidelines in order to meet the criteria of Fannie Mae and Freddie Mac. However, a conventional loan is appealing to those who qualify as they may be able to receive a lower interest rate.

To qualify, you must have a minimum FICO score of 680 but exceptions can be made as low as 660. Your credit score will determine the rate you are quoted.

For DSCR rental loans, the maximum loan-to-value (LTV) is up to 80% for purchases and rate-term refinances, and up to 75% for cash-out refinances. That means a minimum 20% down payment is typically required on purchases, and at least 25% equity is needed to qualify for a cash-out refi. 

In some cases, higher LTVs may be available depending on factors like your credit score, the property type, and the overall strength of the deal. That’s why it’s always best to request a personalized quote.

Yes, we do.

Yes, we can go up to 10 units on our 30 year DSCR Loan Program.

In most cases, there’s a three-month seasoning period for a cash-out refinance. However, depending on factors like loan scope, credit score, and borrower type, it could extend up to six months.

For real estate investors who purchased a property free and clear with no liens at closing, we offer a Delayed Purchase Program. This option does not require any seasoning and allows financing based on the original purchase price and rehab costs within the first six months. After that period, investors can refinance using the property’s true loan-to-value (LTV).

We do finance certain commercial properties under our DSCR rental loan program, specifically mixed-use buildings that meet a few key criteria. The property must have between two and eight total units, and at least 51% of the square footage must be residential. The commercial portion must be office or retail space, and it must be occupied at the time of financing.

These loans follow the same DSCR terms, including up to 80% LTV, no tax returns required, and a minimum credit score of 680.

We do not finance pure commercial properties like standalone office buildings, industrial facilities, or fully retail structures. Each mixed-use scenario is unique, so we recommend speaking with our team to determine whether your property qualifies.

Getting your DSCR (Debt-Service Coverage Ratio) loan is a straightforward process that requires several documents and steps:

1. Short 1-Page Application: The application process is quick and uncomplicated, typically involving filling out a simple one-page form.

2. Proof of Insurance: You will need to provide proof of insurance to ensure that your property is adequately protected against potential risks.

3. Executed Lease Agreement: This document confirms that your property is generating income through rental agreements.

4. Purchase Settlement Statement: Providing details about the acquisition of your property, this statement is essential to the loan application.

5. Driver’s License, Passport, or Green Card: You must present a valid form of identification, such as a driver’s license, passport, or green card, for verification purposes.

6. Two Months Bank Statements: These statements offer a glimpse into your financial health, demonstrating your ability to handle the loan.

7. Entity Documents & W9: If you are applying for the loan as a business entity, you will need to provide essential entity documents and a completed W9 form.

Having these documents ready and following the application process will help you secure your DSCR loan with ease.

Our DSCR loan program offers several prepayment penalty (PPP) structures designed to align with your investment strategy. Options include no prepayment penalty on select loans, a 3-2-1 step-down structure, or a 5-4-3-2-1 option that offers the most favorable rates for long-term holds.

For short-term strategies such as planning to sell or refinance within three years, choosing a shorter PPP like 3-2-1 or selecting a loan with no penalty can provide more flexibility, though often with slightly higher rates. Investors with long-term buy-and-hold goals typically benefit most from a 5-4-3-2-1 structure, which allows for lower interest rates in exchange for a longer commitment.

Interest-only options and rate locks are available across most DSCR programs, and we’re happy to model different scenarios to help you weigh rate versus flexibility. The longer you’re comfortable committing, the more favorable the pricing tends to be.