Question 1

1. What credit score is required for a DSCR loan?

Accepted Answer

To qualify for a DSCR loan, a minimum credit score of 640 is typically needed. However, requirements can vary by lender, so it’s best to check specific criteria. The quickest way to see where you stand is to complete our simple 5-step application, which takes about 15 minutes.

Question 2

What are the Loan-to-Value (LTV) requirements for DSCR loans?

Accepted Answer

For DSCR loans, you can get up to 85% LTV (15% down) on purchases if you have a 740 credit score and 24 months of rental investment experience. For typical DSCR loans: Purchase, Refi, or Rate/Term Refinance: Up to 75% LTV for 2-4 unit properties. Cash-Out Refinance: Up to 75% LTV for 1-unit properties and 70% for 2-4 unit properties. This flexibility helps you maximize your investment potential.

Question 3

3. What states do you serve?

Accepted Answer

We currently offer DSCR loans in: Alabama, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
We do not currently originate in: Alaska, Arizona, California, Idaho, Iowa, Minnesota, Nevada, North Dakota, Oregon, South Dakota, and Vermont.

Question 4

Is personal income verification needed for DSCR loans?

Accepted Answer

No, personal income verification is not required for DSCR loans. These loans focus on the property’s rental income, making it easier to scale your portfolio beyond the limits of traditional loans. This makes DSCR loans an excellent option for investors looking to grow their holdings quickly.

Question 5

5. Can I use an LLC for a DSCR loan?

Accepted Answer

Yes! DSCR loans are designed for investment properties, so borrowing through an LLC can help limit your liability and build a credit profile for your business.

Question 6

6. What loan terms are available for investment properties?

Accepted Answer

We offer 30-year and 15-year terms. Additionally, for DSCR loans, we have a 40-year option and a 30-year term with the first 10 years as interest-only payments.

Question 7

7. Are interest-only options available?

Accepted Answer

Yes, we offer a 40-year term and a 30-year term with interest-only payments for the first 10 years, exclusively for DSCR loans.

Question 8

8. What’s the minimum and maximum loan amount I can get?

Accepted Answer

Our DSCR loans start at $75,000 and go up to $5 million, giving you the flexibility to finance a range of properties.

Question 9

Can I get a rehab or fix-and-flip loan?

Accepted Answer

Yes! We offer rehab loans with 100% financing for rehab costs to help you transform your investment properties. This allows you to focus on maximizing your property's value without worrying about upfront costs.

Question 10

10. Can I use a DSCR loan for my primary residence?

Accepted Answer

No, DSCR loans are strictly for investment properties.

Question 11

11. Do I need an LLC to get a DSCR loan?

Accepted Answer

This depends on the state where you are purchasing. Contact us to discuss your specific situation.

Question 12

12. What are Points, Origination Fees, and credits?

Accepted Answer

• Points: Discount points are a form of prepaid interest that allows borrowers to lower their mortgage interest rate by paying an upfront fee at closing. This helps reduce monthly payments over the loan’s term.
• Credits: Lender credits are offered in exchange for a slightly higher interest rate and can be used to offset some or all of your closing costs. This option is ideal for reducing out-of-pocket expenses at closing.
• Origination Fees: An origination fee is a one-time cost charged by the lender for processing your loan application. It is typically a percentage of the total loan amount and is paid at closing.

Question 13

13. What types of properties are eligible for a DSCR loan?

Accepted Answer

DSCR loans can be used for single-family homes, multi-family properties (up to 4 units), short-term rentals like Airbnb, and commercial properties with 5 or more units.

Question 14

14. What happens if my DSCR falls below the lender's ratio requirement?

Accepted Answer

If your DSCR falls below the lender's requirement, you may need to bring an additional 5% down payment for a purchase.

For a refinance, your loan-to-value (LTV) ratio might be reduced by 5%.

Question 15

15. Can I refinance my existing investment property with a DSCR loan?

Accepted Answer

Yes, refinancing is available for investment properties through a DSCR loan.

Question 16

16. How quickly can I close on a DSCR loan?

Accepted Answer

Our average closing time is 24 days. However, this can vary depending on factors like
title clearance and appraisal reports, which typically take 10–14 days.

If transferring an appraisal and the title is complete, closing can occur in 2 weeks or less.

Question 17

Is a down payment required for a DSCR loan?

Accepted Answer

Yes, a down payment of 15%–25% is required, depending on factors like your credit score and investment experience. This ensures you have a stake in the investment, which can improve your loan terms.

Question 18

Do DSCR loans have prepayment penalties?

Accepted Answer

Yes, DSCR loans can have prepayment penalties ranging from 0 to 5 years for single-family homes or properties with up to 4 units. These are step-down penalties, decreasing by one year with each year of payments. For commercial loans with 5 or more units, a 5-year prepayment penalty is required. It's important to review these terms to plan your investment strategy effectively.

Question 19

19. Can I use rental income projections for DSCR qualification?

Accepted Answer

Yes, rental income projections can be used for the initial loan submission. However, the appraiser's 1007 report will determine market rents, and the lender will base their calculations on those numbers.

Question 20

20. Do you offer loans for short-term rental properties like Airbnb?

Accepted Answer

Yes, DSCR loans are available for short-term rental properties.

Question 21

21. What documents are required to apply for a DSCR loan?

Accepted Answer

Legal Identification: Driver's license, passport, or equivalent.

Two months of bank statements.

LLC Documentation: EIN, Articles of Incorporation, and Operating Agreement (if
applicable).

Completed loan application.

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