Rental Investment Loans
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WHAT IS A DSCR LOAN?
DSCR loans are great for real estate investment rentals/holds. They focus on the income from a rental property and the credit worthiness of the borrower.
DSCR LOAN REQUIREMENTS.
Unlike traditional loans that require massive underwriting requirements, DSCR loans only look at three items.
- Income: Your current rents need to cover the full cost of the monthly obligations. This includes your mortgage payment, property taxes, property insurance, and HOA. If your monthly rental rate covers all these costs, then you’ll meet a lender’s income requirements.
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2. Credit Score:Typically, your credit score needs to be 680 or higher. But there are options at lower LTV’s if your credit score does not hit the mark. (Here are some tricks to get that credit score up quickly).
3. LTV: For purchases and rate & term refinances, the maximum LTV for most DSCR loans is set at 80%. Cash out refinances max out at 75% LTV. With the right factors, LTV’s can go 5% higher, but expect to pay a higher rate.
Rental Status
Whether you’re purchasing or refinancing, a rental property does not need to be rented. Underwriting is based off the current market rents for properties in your area.
SHORT-TERM RENTALS
There are plenty of options using DSCR loans for short term rental purchases and refinances.
Not all DSCR loans and companies will allow income from a short-term rental/Airbnb unless you have 2 years history of rental income as a short-term rental. Short-term rentals can use a DSCR loan program but might need to qualify with long-term rental rates in the area.
NEGATIVE CASH FLOWING PROPERTIES
If your rental property is currently not cash flowing, no problem. There are DSCR loans that will allow negative cash flowing properties. These loans usually come with a lower LTV and higher costs.
DSCR loans come in many shapes and sizes. That’s why we have several sources for our loans. We’re able to provide a variety of options for anyone looking for a DSCR loan.
Apply for a DSCR loan!
Ready to apply? Click the Quick Loan Inquiry button below or email info@thecashflowcompany.com.
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The Cash Flow Company can help you with all your funding needs for real estate investing. We provide conventional loans, private money loans, DSCR loans, and lines of credit. We fund on all types of properties and locations.