Home Loans for Property Investors
DSCR Loan
With a DSCR mortgage, borrowers can secure financing for their properties based on the property’s actual income and expenses. Thanks to DSCR loan borrowers with lower credit scores or irregular income streams can still qualify for financing if their properties generate enough cash flow to cover the loan payments.
Occupancy Business Purpose Investment Properties only
Program Overview
- Loans up to $3 million with a minimum of $100,000
- Qualification based on property cash flow
- No personal income or employment information required
- Long-term and short-term rentals allowed
- Properties can be in LLC’s name
- Vacant properties allowed
- No limit on total number of properties
- Borrower must own primary residence
- Purchase and cash-out or rate-term refinance
- Loan amounts greater than or equal to $1,500,000, a borrower paid second appraisal must be obtained
- Non-warrantable condos allowed
- Non-permanent residents allowed
- Condotels now allowed (contact your local account executive for eligibility requirements)
- DSCR < 1.0 and no DSCR options available
Frequently Asked Questions
While DSCR loans may not have the exact same requirements as Conventional mortgages, there are still guidelines real estate investors will have to meet to qualify.
Unlike Conventional mortgages, DSCR mortgages are not backed by entities like Fannie Mae and Freddie Mac. Therefore, there are no standardized requirements. However, there are a few things that we will look at.
- DSCR. Generally speaking, most lenders require a DSCR between 1 and 1.5 to qualify for a DSCR loan, with the most common minimum requirement being a DSCR of 1.25. We go as low as zero!
- Credit score. Each lender will require a specific credit score, with minimum requirements typically ranging from 620 to 700. We go down to 620.
- Down payment. Most DSCR loans have a maximum LTV of 80% — you will need a down payment of at least 20% to qualify. We offer LTVs up to 80%!
- Cash reserves. Like other investment properties, DSCR loan lenders require a certain amount of cash reserves, often equal to six months of payments. We only require 3 months of reserves!
- Loan amount. The maximum they can borrow for a DSCR loan depends upon the lender, but many financial institutions offer loans up to $2 million. We offer a maximum of $3 million!
- Prepayment penalty. Unlike Conventional loans and typical investment property loans, many lenders charge prepayment penalties on DSCR loans. We can offer up to 5 years of prepayment penalties!
Property eligibility. DSCR loans can be used for investment properties with one, two, three, or four units. In certain cases, we have been able to approve up to eight units!
DSCR loans have many advantages including:
- Different eligibility requirements. DSCR loans use the rental income from a property, rather than the borrower’s income to qualify. This means that they can buy an investment property even if their income makes them ineligible.
- No limit to the number of loans. There is a limit to how many rental properties a borrower can buy with Conventional mortgages, but they can generally take out as many DSCR loans as they want.
- Quicker closing. DSCR loans may have quicker closing times than Conventional mortgages because of simplified documentation.
- No employment verification. Because the borrower’s income is not used to qualify for a DSCR loan, there is no employment verification required.
DSCR DSCR = Gross Rents / PITIA (fully amortizing) or Gross Rents / ITIA (interest only loans)
Credit Standard: 3 tradelines reporting for 12+ months or 2 tradelines reporting for 24+ months all with activity in the last 12 months Acceptable tradelines must show 0x60 in most recent 12 months from application date.
Prepayment Penalty Standard = % of amount prepaid (partial or full prepayment): 5‐year penalty with 5%, 4%, 3%, 2%, 1% stepdown fee structure; OR 3‐year penalty with 3%, 2%, 1% stepdown fee structure; OR 2‐year penalty with 2%, 1% stepdown fee structure; OR 1‐year penalty with 1% fee
Seller Concessions Up to 3% towards closing
Reserves Standard: 3 Months PITIA (Loan Amount ≤ $1mm) | 6 Months PITIA (Loan Amount > $1mm) DSCR < 1.00x – 6 Months PITIA Foreign Nationals – 6 Months PITIA
Cash Out $500,000 Max Cash-Out; Cash-Out may be used towards reserves
Bank Statement HELOC
Program Overview
- Loan amounts up to $400,000
- Revolving line of credit
- Interest only payments during draw period
- Loan terms from 15 to 25 years
- Full doc or business bank statements
- Owner-occupied, second homes, and non-owner occupied
- Eligible for US citizens and permanent resident aliens
- No restrictions on how funds can be used
- Owner occupied program is not available in TX
- Program not available in TN
- Min FICO 720
- Max LTV 85%
12/24 Months Bank Statement
- Loans up to $4 million with a minimum of $150,000
- 12- or 24-months business or personal bank statements
- Two years seasoning for foreclosure, short sale, bankruptcy or deed-in-lieu
- One year self-employed required on business bank statement only
- Two years self-employed required on personal bank statement
- Borrowers can own as little as 50% of the business for business bank statements and 25% for personal bank statements
- Purchase and cash-out or rate-term refinance
- Owner-occupied, second homes, and non-owner occupied
- Profit and Loss (P&L) statements are a valid form of income verification
Foreign National
Program Overview
- Minimum loan amount of $100,000
- Maximum loan amount of $1.5 million
- A DSCR program with a 1:1 ratio on cash flow
- Assets sourced and seasoned for 60 days - must be in a U.S. FDIC insured bank for a minimum of 30 days
- 12 months reserves required
- Closing in a U.S. LLC entity is permitted
- ACH auto-payment is required
- No sanction listed countries allowed and will not lend in Osceola County
- Cannot reside in the United States
- Must have an eligible Visa: B-1, B-2, H-2, H-3, I, J-1, J-2, O-2, P1, P2
- No gift funds allowed
- Loan amounts greater than or equal to $1,500,000, a borrower paid second appraisal must be obtained
- Min FICO N/A
- Max LTV 70%
Frequently Asked Questions
Yes, it is possible that a larger down payment is required for a Foreign National loan, but the percentage will vary depending on the borrower’s specific financial circumstances.
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