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DSCR LOANS

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)

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The loan terms for a DSCR Loan are determined by the following criteria:

  • DSCR Ratio - (how well the property cash-flows) - We will finance properties with a ratio of 0.75 and higher.

  • The applicant's middle FICO score

  • Size of the down payment.

  • Prepayment Penalty (optional) - Options include: no prepayment penalty, 1 year, 2 year, or 3 year (ask your Loan Originator for details)


The minimum down payment for seasoned investors is 20%. For first-time investors, the minimum down payment is 30%. (a seasoned investor is defined as an applicant with 12 months of landlord experienced in the past 12 months)

Applicants must have 3 active credit tradelines appearing on credit history for the most recent 12 months, *OR* 2 active tradelines for the most recent 24 months. Applicants must have prior homeownership experience in the most recent 3 years, and have a clean, verifiable residency payment history in the most recent 12 months.