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Updated 10 months ago on . Most recent reply

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Erin Murphy
  • Real Estate Agent
  • Bayonne, NJ
5
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21
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DSCR for first time homebuyer?

Erin Murphy
  • Real Estate Agent
  • Bayonne, NJ
Posted

I've heard a few lenders say they can't help a first time homebuyer with DSCR.

I’m a first time homebuyer looking to purchase a single family rental property in NJ. I’m self-employed, so most likely won’t be approved conventionally. 

Are there any lenders who allow 20% down DSCR for a first time homebuyer?

If not, do I have any other options at 20% down? 

Thank you!

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Robin Simon
#3 Private Lending & Conventional Mortgage Advice Contributor
  • Lender
  • Austin, TX
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Robin Simon
#3 Private Lending & Conventional Mortgage Advice Contributor
  • Lender
  • Austin, TX
Replied
Quote from @Erin Murphy:

I've heard a few lenders say they can't help a first time homebuyer with DSCR.

I’m a first time homebuyer looking to purchase a single family rental property in NJ. I’m self-employed, so most likely won’t be approved conventionally. 

Are there any lenders who allow 20% down DSCR for a first time homebuyer?

If not, do I have any other options at 20% down? 

Thank you!


This is an area that is certainly tightening up lately - almost more so as a protection against fraud (borrowers that can't qualify for a owner-occ conventional loan so they pretend to buy an investment property to get a home), but also just risk in general. So the "story" of why you are buying a SFR rental but also renting yourself should be very clear in a Letter of Explanation.

However, these cases can be looked at generally - do you have other investment experience - or is this first foray into real estate completely?  Definitions can vary and be fuzzy lender to lender, program to program, and differ between "first time homebuyer" and "first time investor"

  • Robin Simon
  • [email protected]
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