SFR loan programs < 25% down

[Tyler Carter]

Recently completed a cash-out refi and want to take that money and buy 2 additional properties (~$200k or less each).  Currently have 3 rentals and conventional lending has been my norm, but all the local lenders are predominantly 25% down.  Some have a 20% down, but the rate rises significantly.  Great credit scores and plenty of income from my W-2 source.  Are there decent 15% or 20% options out there for purchases in Alabama?

[Derek Brickley]

You could potentially do 15% down DSCR, but you'll see rates rise for that as well. Happy to go through some details on that though if that would be helpful!

[Jeff Chisum]

DSCR right now is going to have better rates and lower cost right now. With compensating factors I have a really good 15% down option on DSCR

[Patrick Roberts]

No matter what program you use, you're going to see a major jump in pricing/rate from 25% down to 20%, and again from 20% to 15%. No way around it. Gotta have some skin in the game. 

[Andrew Zamboroski]

Quote from @Tyler Carter:

Recently completed a cash-out refi and want to take that money and buy 2 additional properties (~$200k or less each).  Currently have 3 rentals and conventional lending has been my norm, but all the local lenders are predominantly 25% down.  Some have a 20% down, but the rate rises significantly.  Great credit scores and plenty of income from my W-2 source.  Are there decent 15% or 20% options out there for purchases in Alabama?

Unfortunately there is a rate adjustment adjustment between 75% and 80% ltv on almost any product. You may want to look at concessions to help cover costs or buy down your rate to a comfortable payment.

[Robin Simon]

Yes - you should be able to find some good DSCR Loan Options with 20% down easily - 15% down potentially available but the rates/requirements are pretty high on that front right now

[Tyler Carter]

Thanks everyone. Never used a DSCR loan in the past and have always understood those rates to be higher by a point or two in most cases. Sounds like if I stay conventional then my best rates will no doubt be the 25% down options. This is what I have done on all my other rentals, but am trying to maximize my cash to buy multiple properties. Thanks.

[River Sava]

As others mentioned, a DSCR is worth exploring here. I am also from Huntsville, happy to connect with you.

[Erik Estrada]

You can purchase with a 15% down DSCR loan, however you should factor in the higher rate and fees associated with the loan. It may make more sense in the long run just to put 20% down instead. DSCR loans carry Prepayment Penalties, so unless you are comfortable staying in a 9%+ rate for 5 years, I would suggest just going with a normal 20% down DSCR.

[Jay Hurst]

Quote from @Tyler Carter:

Thanks everyone. Never used a DSCR loan in the past and have always understood those rates to be higher by a point or two in most cases. Sounds like if I stay conventional then my best rates will no doubt be the 25% down options. This is what I have done on all my other rentals, but am trying to maximize my cash to buy multiple properties. Thanks.

 You absolutely can buy a single family investment property with 20% or 15% down. We do it everyday.