DEBT SERVICE COVERAGE RATIO LOANS
RESIDENTIAL INVESTMENT LENDING BASED ON THE CASHFLOW POTENTIAL OF THE HOME.
DESIGNED FOR SEASONED INVESTORS LOOKING FOR A LOW-DOCUMENTATION PROGRAM, BUT WITHOUT THE HARD MONEY INTEREST RATES AND TERMS.
This is a called a DSCR (Debt Service Coverage Ratio) Program. When the appraisal is ordered, a licensed appraiser performs a standard residential appraisal report, along with a supplemental report called a Market Rental Analysis which provides the average market rent for similar homes in the surrounding area.
This number is then compared to the full monthly payment on the new loan. (example: A ratio of 1.0 means that the rent supports 100% of the new payment)