Question about DSCR Loans

[Charyl J.]

Hello friends,

I'm currently in the researching and getting my finances together phase for property #3. I want this property to be a small multifamily (2-3 units). One day on Facebook I saw someone mention a property they bought with a DSCR Loan. It was actually my first time hearing about a DSCR Loan. Does anyone here have experience using this type of loan, and can offer a little insight? Would I be able to look into this loan to purchase a small multifamily property?

As always, I appreciate any help anyone can give.

Thanks!

Charyl Jones  

[Felicia Lucco]

For those who said there's no credit check, that is not correct. I am currently obtaining a DSCR loan for a short-term rental. The reason I went with this is because I am self-employed and have no W2 income verification. DSCR loans were created for that purpose. My tax returns will show a drop in income over the past two years; however, I have cash for a down payment and closing. 

A DSCR loan takes into account the potential income of the property itself. HOWEVER, they still look at your credit history and score. And yes, the interest rate is higher than a traditional loan and I must put 20% down.