How to Navigate Rental Property Investment with a DSCR Loan
Lenders have created a veritable milk shake of 1 to 4 unit rental financing options, also know as DSCR loans. This loan possesses a lot of positives that set it apart from other loan products. Investors use these programs to acquire long term rentals and Airbnb properties in 40 states. We’re seeing a large uptick in inquiries.
One of the main benefits of a DSCR loan is that a personal income calculation is not required. The lender looks to the rental cash flow of the real estate investment at hand. This replaces the need to turn in paystubs, tax returns or employment verification. If the property is vacant, the lender will request the appraiser to provide an estimate of projected rents.
A second benefit is the accelerated closing process. We have closed these loans in as little as 3 weeks. In today's competitive market, the ability to close quickly is extremely valuable.
Other flexible features include:
Down payments amounts vary from as low as 15% to 25% depending on the lender.
The lender can fund these loans with FICO scores as low as 600.
These loans have lighter financial covenants than commercial loans. For example, rates can be fixed for 40 years and 10 year IO terms are available.
These are available to Foreign Nationals as well
We work with over 12 wholesale lenders to source the best loan for each investment scenario for our clients.
