DSCR Loan

DSCR

DSCR

DSCR is a loan program designed for financing investment properties with a Debt Service Coverage Ratio (DSCR) of 1.0 or higher. This product offers flexible terms for purchases, rate & term refinances, and cash-out transactions for business purposes only.

Eligibility:

  • Loan amounts up to $3,000,000 for purchases and $2,500,000 for cash-out.
  • Minimum FICO: 660, with higher DSCR requirements for FICO scores between 660-679.
  • Maximum LTV: 80% for purchases, reduced by 5% for interest-only loans.
  • Investment properties only, with strict borrower and property restrictions (e.g., no foreign nationals, agricultural zoning, or short-term rentals).
  • Wide range of product terms, including ARMs, fixed-rate, and interest-only options.

Benefits:

  • Allows for delayed financing up to six months after purchase.
  • Accommodates high loan amounts with competitive LTV and DSCR requirements.
  • Suitable for borrowers with prior credit events, subject to a 7-year seasoning period.

Consideration:

  • Minimum loan amount: $100,000 (or $175,000 for DSCR <1.0). Maximum cash-out limited to $500,000.
  • Business assets cannot be used as reserves. Requires full appraisals for loans exceeding $2,000,000 on refinances.
  • Non-warrantable condos, properties with deed restrictions, and solar panels with UCC filings are ineligible.