What is DSCR Loans?

DSCR Loans are designed for real estate investors looking to finance properties based on their income-generating potential, making them an attractive option for expanding real estate portfolios without extensive personal financial scrutiny.

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Key Features

1. No Personal Income Verification: Approval is based on the property’s cash flow rather than the borrower’s personal income.
2. Debt Service Coverage Ratio (DSCR): Loan qualification depends on the property’s DSCR, which measures its ability to cover loan payments with its net operating income.
3. Flexible Property Types: Can be used for various types of properties, including residential, commercial, and mixed-use.
4. Higher Loan Amounts: Typically allow for larger loan amounts compared to traditional loans.
5. Interest Rates and Terms: Competitive interest rates, often with flexible terms tailored to the investment property.
6. No Limit on Number of Properties: Investors can use DSCR loans to finance multiple properties without restriction.

ELIGIBILITY

1. Property Income: Property must generate sufficient income to cover loan payments, typically with a DSCR of at least 1.25.
2. Property Condition: Property must be in good condition and capable of generating rental income.
3. Experience: Some lenders may require borrowers to have experience in property investment or management.
4. Credit Score: Minimum credit score requirements, usually higher than for traditional loans (often around 620 or higher).
5. Down Payment: Typically require a higher down payment, often around 20-25% of the property value.
6. Loan-to-Value (LTV) Ratio: Must meet the lender’s LTV ratio requirements, usually 75-80%