DSCR
Qualify Your Borrowers Using Property Cash Flow—Not Traditional Income Docs!
Debt Service Coverage Ratio loans give investors a straightforward path to financing rental properties. By focusing on rental income and property performance, DSCR simplifies qualification and underwriting. This program helps you support investor clients with a product built for scale and repeat business.
DSCR for Investment Borrowers
- 30 year fixed, 30 year fixed I/O, 5/6 ARM, and 5/6 ARM I/O
- Qualification Based on Cash Flow from Subject Property only
- 680 minimum FICO
- Loan Amounts up to $2M
- Purchase & Rate and Term LTV up to 80%
- Cash out LTV up 75%
- 0 X 30 X 12 Mortgage History Acceptable
Scenarios
Qualify Investors Using Interest-Only Payment
Scenario:
- Borrower is refinancing an investment property.
- When the 1007 rent schedule was received, the borrower’s DSCR ratio using a 30-year Fixed PITIA was calculated at 92.
- Problem: A refinance requires a minimum DSCR Ratio of 1.00 or above.
- Solution: Utilizing 30 YR with a 10YR interest-only feature, borrowers can qualify using the lower interest-only payment
Expanded DSCR Product is one of the most utilized loan solutions for real estate investors.
Questions?
Gift Funds CAN be accepted
Scenario:
- A borrower is purchasing their first investment property.
- They have saved a 10% down payment.
- They are getting a gift for an additional 15% down payment, the closing cost and reserves.
Problem: Conforming products would not allow gift funds to be used on investment properties. The borrower’s fico is 744, and the debt ratio is 38%.
Solution:
- DSCR allows a borrower to use gift funds to purchase investment properties.
- The borrower was able to purchase their first investment property. The originator saved the day, earned commission, and now has a real estate investor who will be back to close the next deal.
Questions?