What Is A DSCR Loan (Debt Service Coverage Ratio)

A typical Non-QM Debt Service Coverage Ratio (DSCR) loan allows a borrower to qualify for a mortgage based on cash flow generated from an investment property – through a rental, for example – as opposed to their personal income. A calculation generates a debt-to-income ratio and the higher the ratio, the better.

How Do DSCR Loans Work / Who are they designed For

DSCR Loans are designed for borrowers that don’t qualify for traditional debt-to-income loans. This type of loan allows property investors to grow their real estate portfolio. A DSCR loan allows borrowers to qualify based on rental analysis to determine property cash flow. One of the benefits of DSCR loans is that they don’t require personal income to qualify, which saves borrowers from having to submit complicated income statements and tax returns.

What Are the Requirements / How To Qualify

·       FICO 599

Benefits

·      Up to 85% CLTV

·      Loan amounts up to $3 Million

·      Max cash-on-hand $1 million, no limit for CLTV <55%

·      40- & 30-year fixed, 5/6 ARM, and 7/6 ARM terms

·      No income or employment verification

·      DSCR as low as 0

·      Cash-out proceeds may be used for reserves

·      Eligible for Non-Permanent Residents and Foreign Nationals

·      DSCR is available under Foreign National Program

·      Ownership of any property within the past 24 months

·      Condotels allowed

·      Cryptocurrencies accepted for reserves, down payments and closing costs