What’s Next For DSCR Loans? Updates For 2024 and Beyond

[Robin Simon]

Sharing what are some of the things I think may be on the horizon for DSCR Loans in 2024 - inspired by a lot of comments that pop on these forums. Would love feedback/further ideas of what people are seeing or hoping for:

What's Next in DSCR?
❔Medium Term Rentals
❔Single-Room Occupancy
❔Manufactured Housing
❔Mixed Use
❔❔❔Yurts

Full Article: https://www.biggerpockets.com/blog/what-is-coming-in-2024-fo...

[Robin Simon]

Quote from @Nick Belsky:

@Robin Simon

I haven't seen Single-room Occupancy or Mixed-Use DSCR go away at all... There are still a few good resources for Log Cabins or Off-Grid style properties in remote areas as well.

Personally, I'd like to see the return of more streamlined processes with the lenders (at least more so than they are now!).  The products offered will always vary and part of being a broker is knowing the borrower's scenarios and our lenders to know where the pieces fit best.  The volatility of the markets and constantly changing guidelines have been the largest pain points from what I see.  The UW is so inconsistent nearly across the board, it makes it difficult to truly offer a streamlined experience with clients, even when using the same lenders time and time again.  Planning ahead can be challenging when two nearly identical loans get UW and conditioned in very different ways at the same lender.  

I think we've all seen the DSCR rates swing up and down as well over the past two years, on several occasions, DSCR rates were beating conventional rates at par pricing by nearly 0.75% at higher leverages. That was nice to see! They don't last long, but they still occurred. I would like to see the negative connotation that DSCR loans are more expensive and always have higher rates compared to conventional. It's simply not always true. If often price very competitively at par with conventional, if not beating conventional by 0.125% or so.

Overall, not so much concerned with the products offered.  Would like to see lenders get back into a consistent groove with UW and clients with more realistic expectations and better planning.

Cheers!

Good stuff - are you really seeing a solid consistent appetite for true SRO?  That is definitely news to me.

Mixed Use has been around yes but I think the rates had gotten so out of hand that it wasn't really viable much.  Think it roars back in 2024