Understanding the DSCR Loan
DSCR loans (Debt Service Coverage Ratio) are mortgage loans used for purchasing or refinancing short-term or long-term rental investment properties. No income documentation is required. A DSCR loan qualifies borrowers based solely on the cash flow from the subject property. Market rent as determined by an appraiser and lease agreements (when applicable) are the primary tools used to assess the cash flow of the investment property.
No tax returns, income, or employment documentation required
Maximum 80% LTV
A credit score of at least 660
Eligible property types include SFR, PUD, Warrantable and non-warrantable Condos including Condotels, 2-4 units
Min loan amount is $100,000
Max loan amount is $3,000,000
First time investors allowed
Debt Service Coverage Ratio as low as 0.75
Borrower can own unlimited financed properties
Vacant properties with no vacancy factor are eligible for refinancing
Properties can vest title in an LLC, S-Corp, C-Corp, or revocable trust
Interest Only loans available
Gift funds for down payment eligible
Cash-out proceeds can satisfy reserves requirements
Unlimited cash in hand for LTV <= 65% or maximum $1,000,000 for LTV > 65%
DSCR Loan Benefits
The primary benefit of a DSCR loan is that no income documentation is required to qualify. There is no DTI or residual income requirement.
Other Benefits Include:
- Vacant properties with no vacancy factor are eligible for refinancing
- Properties can vest title in an LLC, S-Corp, C-Corp, or revocable trust
- Interest Only loans available
- Gift funds for down payment eligible
- Cash-out proceeds can satisfy reserves requirements
- Unlimited cash in hand for LTV <= 65% or maximum $1,000,000 for LTV > 65%