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Real estate investors are taking advantage of the DSCR Loan to expand their portfolios. Also known as investor cash flow loans or non-QM, they are ideal for property investors, especially self-employed or investors holding large portfolios of real estate. In business since 2013 and with over $500 million in fundings, leverage our experience for reaching your investment goals. Contact us today for a conversation on how we can assist.
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Faster Closing Times
Unlimited Cash Out
No Personal Income Requirements
No Employment History Verification
LLC and Other Entities Allowed
Your Trusted DSCR Specialist
DSCR loans have become a popular option for real estate investors because they offer financing based on the income potential of a rental asset rather than the borrower’s personal financials. With conventional loans typically focusing on debt to income ratios (DTI) and two years of financial documentation requirements such as tax returns and W-2’s, this can be difficult and time consuming if you are self-employed or have a large portfolio, however DSCR loans use the property’s income to determine eligibility.
With over 40 years of combined experience in mortgage lending and hundreds of 5-Star client reviews, feel free to contact our licensed Loan Advisor today for a consultation.
- Faster Funding Times
- Purchase or Cash Out
- Flexible DSCR Solutions
- Short or Long-Term Rentals
- Vacant or Occupied Properties
- Full 30-year Terms with No Balloons
Debt Service Coverage Ratio Calculation Example
The following is an example of how the lender may underwrite the DSCR loan
DSCR = Gross Rental Income / Monthly Debt
Subject Property: Single Family Rental
Annual Gross Revenue: Property is renting for $3,000 per month with an annual gross revenue of $36,000
Operating Expenses: Principle, Interest, Taxes, Insurance and HOA add up to $2,500 per month with an annual operating expense of $30,000
Annual rent of $36,000 / Annual debt of $30,000 = 1.2
A DSCR of 1.2 indicates that the property generates 20% more income than is needed to cover the debt service. A DSCR above 1.0 suggests that the property has strong cash flow position and should be able to comfortably handle the new loan.
Most DSCR loan providers require a DSCR of 1.0 or higher. With Independent Lending we can go lower under certain compensating factors. Call us today at 1.800.315.0043 to learn more about qualifying for a DSCR loan.
Common DSCR Questions
A: Each month, the interest is added to your loan balance. You only repay the loan when you sell the house or when the loan becomes due (such as after you pass away).
A: The acronym DSCR stands for Debt Service Coverage Ratio. A DSCR loan is a Non-QM or Investor Cash Flow loan program used by property investors nationwide allowing them to purchase or cash out of their rental property. This loan type focuses on the cash flow generated by the rental property rather than by the personal income of the borrower.
A: Yes, typically other DSCR providers require a credit score of 620+ however with compensating factors, we can go down to 575 scores.
A: Yes, the Underwriter will look at this scenario on a case by case basis. Typically if the subject property was recently remodeled or purchased an exception can be requested.
A: Yes, minimum down payment is usually 20% depending on other factors such as property type and credit score.
A: To begin the process you can call us direct at 949.216.3902 or toll free at 1.800.315.0043. You can also complete our Contact Form or fill out our secure one page Application Form.
How a DSCR Loan Can Grow Your Portfolio
DSCR loans can offer strategic opportunities for investors looking to grow their rental portfolio in dynamic real estate markets. Because DSCR loans are evaluated based on the subject property income potential and not the borrower’s personal income or employment history, there is no limit to the number of properties you can own. Approval to funding is faster than other full document type loan programs because there is no underwriting of personal financials. DSCR loans also allow Investors to close in an LLC and other entities as an extra layer of privacy or protection.
- Unlimited Property Portfolio
- Less Documentation Required
- Rental Property Focused Lending
- Flexible Common Sense Undwriting
- Rental Cash Flow Not Personal Income
- Quick and Streamlined Underwriting Approval
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Call Toll Free: 1.800.315.0043 / Local: 949.830.3151 or click the Contact Us button to fill out our secure web form for a call back. At Independent Lending, we give every loan request the respect it deserves.
