All Forum Posts by: Brittany Minocchi

Hi Brian!

If you're talking about 2-4 units, I'd go with conventional for as long as you can qualify. Anything more than 4 units and you're getting into commercial. Once that's not an option, DSCR loans are great. Because they're a higher risk for a lender, rate and terms aren't typically as good as conventional. Your employment, income and DTI are not factored in. The income potential of the property is what qualifies you. There are also no ratio loans, where the DSCR (debt service coverage ratio) isn't as important, but rather your credit, LTV and reserves. Both of those options have prepayment penalties and minimum loan amounts are usually $75k-$150k depending on the lender.

Many lenders have minimum loan amounts of $100k-$150k. If you are at $90k after accounting for your 25% down, you're below that threshold. I may be able to help -- feel free to send me a message. 

Hi Justin, 

I'm in Ohio and invest in multifamily properties as well. Rates will vary based not only on credit, but whether or not you are planning on living in a unit, the loan amount, etc. Feel free to reach out to discuss. 

Hi Forrest, 

I've got a lender that'll do nonQM cash-outs using ARV with no set seasoning period as long as you can show improvements were made (before and after pictures would satisfy this requirement). If you want to go conventional, you'd likely be looking at a 6 month minimum seasoning to use ARV.
 

Like @Jack Mawer said, a DSCR loan is a great option for your situation.

@Will Schwalm for a conventional loan, yes, 2 years of employment history is a standard requirement. There are some nonQM options for those with income or employment issues that would disqualify them from conventional financing, like a DSCR loan. This type of loan uses the property's potential income to qualify and does not take your employment/DTI into consideration. Right now, you'd need 20-30% down, a credit score of 620+ and 3+ months of reserves. They also have prepayment penalties and higher rates compared to conventional loans. Happy to discuss further if you'd like to reach out!

@Chris Artz I work for a broker and have multiple lenders that will do DSCR loans on 1-4 units. Feel free to send me a message to discuss.

@Vamsi Peddinti I may be able to help -- how many units is the property? 

@Blake Ramsey your income or employment history isn't a factor with a DSCR -- it is based on the potential income of the property using either a current lease or market rents. The lender will use the lower of the two in most cases. Most lenders require a score of 620+, 20-30% down and 3+ months of reserves. They do have prepayment penalties that can sometimes be bought out if that's an issue. They will have higher rates than a conventional loan. Around a 0.75-1.25 DSCR is typically required (the higher the ratio, the better the terms/rate). These guidelines are constantly changing, but that's what they look like right now.