Financing Multi-Family with DSCR Loans

[Gabe Callaway]

Hello,

Long time listener, first time caller. (Love a good radio throwback)

I am curious what/how most people are financing multifamily deals? What is the "traditional" way of financing them? Are DSCR loans looked down upon? I have many properties with 1-4 units but am looking at mid size properties and wondering what path to walk down for funding these.

Thank you!

[Matthew Kwan]

You can either go towards DSCR where it does not require to use your income to qualify, where it only looks at the performance based of the rental property in a metrics of ratio. Or bank statements loan where lenders would only use 12 months deposits from your bank statements an average it out to calculate the income. Both of these programs can help qualify and obtain a loan for investment properties, but the tradeoff is that these programs have slightly higher rates than conventional loans.

If you are looking for lower rates which everyone tries to, you can always consider the traditional route of conventional loan where rates are typically lower 1-1.5% but you would want to make sure if your income/credit/assets can qualify for it.

@Carlos Valencia @Albert Bui