DSCR Lenders or HELOC on Investment

[Pierre Eade]

Hey Community! 

I have a SFH in my portfolio that has a good deal of equity and only a HELOC (TD BANK) on it for 10.24%. TD was not interested in doing a new HELOC because my portfolio is too big for their lending requirements (7 properties with primary, I thought the limit was 10, but evidently not).

In any case, I am looking to either do a DSCR loan or if possible find another company that would do a HELOC on an investment property.

I am wondering what lenders you are currently happy with on the DSCR side and if you know any that still give HELOCs on investments.

Thank you so much! 

Pierre Eade

[Andrew Postell]

@Pierre Eade thanks for the post.  Several layers to what you are asking so I'll try to tackle some of these one at a time if you don't mind.

HELOC when I already have a HELOC - this is somewhat difficult for lenders to do. Frankly, it's not so easy to find a lender that will do a HELOC on an investment property in the first place, but if you already have one, sometimes they will just take a pass. You might be able to find one (but more on that in a second).

10 Loan Limit and overlays - the "10 loan limit" is a Fannie/Freddie rule. So, if you are getting a DSCR style loan, those types of lenders won't have those types of restrictions. You can have as many DSCR loans as possible. So, why did that one lender say 7 was the limit? That's because Fannie/Freddie allow lenders to put rules OVER their own guidelines. They completely allow companies to be more strict with lending...but not less strict. If a lender has such a rule we call those "overlays". And we, as investors, want to work with lenders with NO overlays.

Good Fannie/Freddie and "other" Lenders - so how do we find lenders that are friendly to us investors?  I wrote an entire post here on Bigger Pockets that you can read HERE.  Check that out and see if that helps you with finding some.

Thanks for reading!