Recommended DSCR lenders in DFW?

[Eyal Goren]

We're looking for lenders who offer DSCR loans in DFW.

What's the best place to look for them? So far we only called banks that popped up on Google maps.

[Robin Simon]

Quote from @Eyal Goren:

We're looking for lenders who offer DSCR loans in DFW.

What's the best place to look for them? So far we only called banks that popped up on Google maps.

 Can look at BP Find A Lender tool: https://www.biggerpockets.com/business/finder/lenders

google search etc.

Also, as some others have commented, DSCR Lenders tend to be national platforms and not really tied to your local market to get the best rates and terms, sharing this article I wrote last year for BP that broke this down too in case it helps!
https://www.biggerpockets.com/blog/dscr-loans-terms-to-know

Types of Rental Property Lenders

While a lot of these aren’t official and can have some overlap, here are the types of lenders that you will encounter when getting loans for your rental properties:

Non-QM lenders

These are lenders that provide mortgage loans, both for owner-occupied and non-owner-occupied (rental properties), that do not qualify for CFBP mortgage requirements, which generally are defined as loan requirements for purchase by government-sponsored enterprises (GSE). Qualifying mortgage loans typically require stable W-2 employment and DTI ratio requirements, so non-QM lenders primarily serve homeowners who are self-employed or employed as 1099 contractors, non-U.S. citizens, and real estate investors.

DSCR lenders

These are private lenders that lend a specific loan product—DSCR loans—and these lenders only provide loans for investors. These lenders have proprietary guidelines that do not have to confirm to GSE agency guidelines. DSCR lenders strictly serve real estate investors, particularly those investors who are scaling past a couple of properties (and thus struggle to qualify for conventional loans), or those who are pursuing innovative strategies such as the BRRRR method, short-term rentals, and multifamily investing.

Banks

While many real estate investors use the term “bank” to describe all lenders that offer rental property loans, banks should be differentiated as financial institutions that operate under strict licensing and regulatory requirements.

Conventional lenders

These are lenders, including banks and lenders that can also offer non-QM loans, that primarily focus on qualifying mortgages or loans that follow the standardized GSE requirements.

Private lenders

Private lenders should be defined as mortgage lending companies that are not non-banks (and thus not subject to banking regulations and licensing requirements) but also have all the infrastructure of a lending company (including necessary licensing, infrastructure, and capital). Private lenders primarily focus on serving real estate investors and can be much more forward thinking and flexible than heavily regulated and standardized peers (such as banks and conventional lenders).

Private money

The term “private money” should be differentiated from private lenders. Private money generally refers to individuals who invest in real estate through lending personal capital, rather than as a full-fledged lending company.

Hard money lenders

Hard money lenders are typically private lenders that typically lend on higher-risk real estate projects, such as properties that need heavy rehab or for borrowers that have challenged credit. These loans are typically of short duration and have higher interest rates and fees, and aren’t used for stabilized properties.

While these definitions are distinct, there is much overlap between the lending types, where one lender can fall into multiple categories. Common examples of this include private lenders that are both DSCR lenders and hard money lenders, or banks that offer conventional and non-QM mortgage loans.