Non-QM Product Insight

[Greg Franck]

Hello BP,

We are looking to do a cash out refi on one of our SFR's and reallocate that cash into a downpayment on an additional property. We are Fannie / Freddied out so we will be looking to move into the non-QM space. I have educated myself on some of the products available and found the most interest in a DSCR loan product as the SFR we are refinancing is cashflow strong. I was hopeful that some of the BP members with experience using these products can provide some basic insights on what we should look for in a provider and some of the terms / covenants that may differ from conventional financing. Additionally if there are any provider recommendations it would be appreciated.

 I will be having conversations with lenders in the next few weeks. Appreciate any insights you guys can provide!

[Robin Simon]

Quote from @Greg Franck:

Hello BP,

We are looking to do a cash out refi on one of our SFR's and reallocate that cash into a downpayment on an additional property. We are Fannie / Freddied out so we will be looking to move into the non-QM space. I have educated myself on some of the products available and found the most interest in a DSCR loan product as the SFR we are refinancing is cashflow strong. I was hopeful that some of the BP members with experience using these products can provide some basic insights on what we should look for in a provider and some of the terms / covenants that may differ from conventional financing. Additionally if there are any provider recommendations it would be appreciated.

 I will be having conversations with lenders in the next few weeks. Appreciate any insights you guys can provide!

Hi Greg - would love to help. I've written a series of articles for BiggerPockets on all the questions and information you would need on DSCR Loans (for people exactly like you - maxxed out of conventional and needing to transition to a new type of loan to scale). It doesn't cover the rest of the non-QM Suite but should have you extremely covered on DSCR!

DSCR Loans: What Are They And How To Get The Best Terms

https://www.biggerpockets.com/...

DSCR Loans: How To Use Pro Strategies To Save More And Make More

https://www.biggerpockets.com/...

Multifamily DSCR Loans: A New High-Impact Loan Option For Real Estate Investors?

https://www.biggerpockets.com/...

12 Frequently Asked Questions (And Answers) About DSCR Loans

https://www.biggerpockets.com/...

8 More Commonly Asked Questions and Answers to DSCR Loans

https://www.biggerpockets.com/...

What Documents Do You Need for a DSCR Loan?

https://www.biggerpockets.com/...