Commercial mortgage for SFH PP up to $200k 20-25 year term

[Emily R.]

I want to buy my next rental through my LLC, but I have no income/activity in the LLC. I was not able to get a loan at KeyBank a couple years back for that reason, but I feel like I should be able to easily be approved. My DTI is around 37-%41%, depending on if I'm able to count my roommate's contribution toward my rent (they are on a sublease, not the main lease.) I'm looking to buy a property where the total monthly payment would be anywhere from $1000, and monthly rent would be around $1500 in zip code 19124

The product I'm looking for is a regular mortgage for a SFH long term rental with a PP of up to $200k on a 20-25 year term in my LLC so commercial. I'd like to put down 25%, but if I'm more likely to get approved with more money down, I'd like to know so I can plan accordingly. I feel like this should be small potatoes for most traditional lenders, but let me know if i am completely wrong. Thanks in advance.

[Brittany Minocchi]

Hey Emily! 

It sounds like a debt service loan is what you're looking for. Employment history, income and DTI are not factors with that type of loan, and you can close in an LLC. The biggest factors will be the property's cash flow and your credit score. Most lenders will require you to personally guarantee the loan, but that doesn't mean that it will report to your personal credit.

With a conventional loan, employment history, income and DTI are factors and you cannot close in an LLC. True commercial financing is for 5+ units, so a SFH wouldn't be considered commercial. Conventional and DSCR aren't always that far apart as far as terms go - it just depends on the situation. The biggest downside to a DSCR is the prepayment penalty, you won't have that with a conventional loan.