DSCR (Debt Service Coverage Ratio)
Investor Cash Flow Loan provides a powerful instrument for your real estate investor clients to purchase more properties by leveraging their cash flow. Our DSCR offering is incredibly flexible, giving your clients a powerful tool, and giving you a loyal and expanding customer base.
- $2 million Loan Amounts
- Cash in hand Unlimited
- Max 6 loans or $5m – which ever comes first
- 1-4 Units
- Low Ratio 0.8/1:1 Ratio
- DSCR 1:1 – 680 Min Credit
- DSCR Elite 1.20 and up – Best Rates
- First Time Buyer/Investor OK
- Up tto 80% LTV
- 100% Gift Funds Allowed No Borrower Min. Contribution
- ARMs – 5/6 ARM, 5/6 ARM 10yr IO (40yr Term)
- Fixed – 30yr Fixed, 30yr Fixed w/10Yr IO, & 40yr Fixed w/10yr IO
- Foreign National OK
- Dedicated Team for DSCR/Investor Loans
- Investment Property Only
Overview:
What is a DSCR Loan?Â
A DSCR loan is simply based on the ratio between rent received and monthly cost or debt. You will qualify based on the rent covering the monthly liability. This loan is not qualified by income or any income documentation. It is solely qualified by rents through a lease or a 1007 market rent schedule on an appraisal to get to your ratio you simply divide your rent by your monthly PITIA.
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What kind of DSCR Products are out there?Â
There are four different types of DSCR products. One is a one-to-one ratio where the rent covers the mortgage payment by 100% or greater there is a low ratio that is .99 2.80 coverage and there is a no ratio where the rent amount is irrelevant to the monthly obligation. Lastly, there is the 5-8 unit DSCR product, which is considered a commercial loan.
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Do I have to have investor experience?Â
You do not need to have experience for one to one or low ratio you do need to have experience for no ratio experience is considered owning one property that you have managed for 12 months.
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Is My Credit Score a Factor in Getting Approved?
Your credit score is a factor in getting approved. The lowest FICO eligible to Finance DSC R is 660. You must have three open trade lines with two being active in the last 12 months. If you are renting your VOR, which is a verification of rent can count as one trade line.
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What Kind of Loan Terms Do You Offer?Â
We offer a 30 year fixed and a 5/6 arm both products offer interest only options both 30 and 40 year
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How Do I Get Qualified?
For DSCR you would need a credit report or you RLA application the market rent amount as well as taxes and insurance or a 1007 market rent schedule with taxes and insurance. You would also need a bank statement to cover reserve requirements or if you were doing a cash out refinance the cash out can cover the reserves.
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What Type of Properties Can I Finance?
You can finance single-family residences condos non-warrantable condos one to four units and 5 to 8 units.
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Different things you can do?
We use the highest middle score to qualify if there are two or more borrowers. First time homebuyers are OK. First time investors are allowed. You can use the interest only payment to qualify. You can close in an LLC or corporation. Not everyone in the LLC has to be on the loan application. If the lease or short term rental amounts are greater than the 1007 market rent schedule we will gross up 115%. We allow 100% gift funds for down payment and closing cost. The only thing the borrower has to cover is reserves for rate in term and purchase. If they’re doing a cash out, they can use their cash out to cover reserves. With a LTV of 60% or less there is no max cash out if the LTV is greater than 60 max cash out is 500 K. Investor LLC loans do not report on credit.
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