House Hack Financing...DSCR?

[Dominic Guerra]

Hey BP Family! 

I am starting to analyze deals for my first house hack here in Houston Texas. I have a 780+ credit score, absolutely no debt, and I just graduated college into a real estate investing job where I am only paid commissions. SO, I do not meet the work/income history requirements for an FHA or Conventional loan (to my knowledge). I refuse to wait two years to build income history to purchase my first house hack and have narrowed my options to: Seller financing, partnering, or using a Non-QM loan. The best Non-QM loan I have found for my scenario is the DSCR loan. I am confused about the down payment as I want to buy the property with little/no money down. If the lender does max of 80% LTV and I purchase a 2-4 unit at a 20%+ discount from its market value does that mean I would have no down payment?

Most importantly does anyone know who to talk to in Houston or nationally for DSCR loans? Do I have any better options, or ways to make a conventional loan work without showing work/income history? I could really use some help....

Thanks :)

[Stephanie Medellin]

@Dominic Guerra Hi Dominic, DCSR loans are not for owner occupied properties (even if they have more than one unit). Many of the DSCR programs require you to own your primary residence. At the very least, they'll want you to have a stable rental history where it makes sense that you won't be moving into the property, but options are limited for first time buyers.

On purchase loans, your LTV is going to be based on the lower of the sales price or appraised value. So if you're under contract for $100,000 and need an 80% LTV loan, your loan will be $80,000 whether the property appraises for $100,000 or $120,000. The higher appraisal does not help reduce your down payment.

College can count toward work history, but you're going to need a full time W2 / salaried job with stable income to go this route.  100% commission income is going to need a history.