When exploring Debt Service Coverage Ratio (DSCR) loans

[Jessica Carcamo]

Greetings!

I am open to connect with experienced professionals in the field, absorb their insights, and build lasting relationships that contribute to mutual growth. with that said I am new to the real estate industry and looking into multifamily properties. thank you for answering all questions!

1. How is the DSCR calculated, and what is the minimum ratio required for approval?

2. What type of collateral is required for the DSCR loan?

3. Are there any planned developments or changes in the neighborhood that could affect property value?

[Carrie Matuga]

@Jessica Carcamo DSCR is calculated by Rent/PITI and the best rates come when Rent/PITI>1.0 and ideally above 1.15. You can go as low as 0.8, but there's typically a hit to your rate. DSCR loan is a recourse loan secured by you and the ratio and your credit are primarily what qualify it. Yes, planned changes can affect a neighborhood positively or negatively.... things like changes in airport traffic, road expansion, putting in a new community park, new construction building and more...