Rookie Multi Family investor utilizes low 15% down payment DSCR loan on 4-Plex

[AJ Wong]

Just wanted to share, I've noticed a loosening in down payment requirements for DSCR (debt service ratio loans) that either use the actual or proposed rental income to qualify. Many lenders have investment property experience requirements, meaning the borrower needs to document owning an investment property currently or previously.. But we just pre qualified a newbie investor with just 15% down on a DSCR four plex!?

There are some borrower caveats: 1. The debt/coverage ratio was fully covered by the rents. (Greater than 1) 2. Higher credit score of 720+ (below might require 5% more down). 3. To get 'over' 80% LTV they had to verify 6 most PITI reserves (as opposed to 3 months).

The same lender said if they could come up with the other 5% they can go 30 year fixed interest only..This is more attractive for cash flow on a higher loan balance but will still be qualified based on the fully amortized rate and payment. 

Hope this helps!