All Forum Posts by: Jesse Byrer

@Sam Chan the more detailed your scenario the more helpful the responses will be.  Do you want to close in your personal name or in an business entity?  Once we know that we'll need to know credit score, property type, purchase or refinance as starting points.  Depending on the answers there will be additional questions.  Happy to drill down if need be.

@Gustavo Alvarez is see there are other lenders that have responded to you and have provide a general overview that I agree with so I won't repeat. I'm licensed in FL and offer DSCR loans and this is one of our niche products. My response will be tailored to what we do...

Yes, we offer No PPP all the way to a 3 YR PPP.  As dicussed before, the tradeoff for No PPP is higher rates.  Our typical PPP is 6 months of interest, but we do offer a step down/tiered option as well (rates are not as competitive).  

What I didn't see mentioned in prior comments (probably becaue it wasn't specifically asked) was paying point or "buying down" the rate.  When I've run into competition on these loans I've noticed most people charge points... which is an additional cost for the rate.  When doing the 3YR PPP I typically don't have points.  This varies based on credit and loan to value, but most of my client have not had to pay points.  Feel free to reach out if you want specifics, but if not best of luck in your journey!

@Cody Coll my response will focus on DSCR loans specifically and I will echo what @Simmy pointed out... be careful of the seasoning requirements on cash out refinances. I'm not sure if you paid for the property in cash and used your own funds to rehab or if you got a loan. If you are trying to recoup some of the money you initially used to purchase and rehab the property and ok with using the purchase price and documented improvement costs you can get back to that money quickly. If you want to access the equity, you created by rehabbing the property your waiting period to use the new improved value can range upwards of 12 months.

I advise my clients to get a PML that will finance 100% of the purchase and rehab expenses so when the property is stabilized, we can treat it as a rate and term refi and use the new improved value from day 1! This will reduce your turn times allowing you to scale much quicker... not to mention reduce the unknow variables that come from having to wait for longer seasoning periods.

The main benefit I see with a DSCR Loan is you don't have to provide your tax returns and provide the documentation on all your other properties. We lend based on the performance of the property. There will be a credit and asset review, but the rest of the file review will be focused on the property. Much easier than a traditional loan. My clients close in their LLCs and have a 3YR PPP. When they do that, the terms are excellent!

I was getting ready to create a post (and still will) about my DSCR program. I switched companies a couple months ago and a stumbled across out DSCR Loans (not the reason I joined the company). Turns our this is a product we're very aggressively priced on an I've been able to beat the terms of everyone I've been compared against... I've never been the lowest rate with any program, and I'm sure someone can offer better, but so far this product has shown itself to be a great niche of mine.

@Kermaury Musgrove  I started investing back in 2010, but it was after I had worked with 50-60 investors and I had seen them successfully buy, rehab, and rent properties before I build up the confidence to try it out for myself.  Timing played a role in my sucess as 2010 was basically the bottom of the financial crash (wish I would have been more aggressive back then :-)).  But I would say having a team help you navigate your first handful of deals is critical.  I would think more so if you are buying out of state... it will be very time consuming to have to go search for all your trades and services.  Better if you can plug into someone that has a strong proven network.  If Chicago or the surrounds suburbs is a place of interest let me know and I can make introductions to great agents, investment groups, wholesales, trades, etc.  Best of luck with your journey!  Don't be afraid to fail forward.

@Angelo Revercomb if you are trying to get to equity in your home and there is a lien (loan) on the property you would either must pay-off that loan with the refinance or get a HELOC as they can be in the 2nd lien position allowing you to keep the current loan in place. As @Jacob St. Martin pointed out these rates are tied to Prime (instrument the Feds have been using (raising) to fight inflation) and has moved up quite a bit over the last year and half. Also, you'd want to make sure there is nothing in your current loan that prevents you from getting a second loan. The documents you'd want to review are the MORTGAGE and the NOTE. The seller might have a clause that discourages this. Rates are higher now, but many are forecasting rates to improve at some point next year so timing might work out for you to do a cash-out refinance. FYI, if you're doing a conventional loan Fannie Mae and Freddie Mac changed their guidelines in 2023 to require that you own the property for 12 months (there are some exceptions like inheritance) before you can take cash out of the property. Hope this helps!

@Ash Sriramoju when you ask about more details I'm not sure what part you'd like to get more details on.  The program is a Fannie Mae's program so it follows normal conventioal guidelines.  We need to full credit qualify our clients (income, assets, credit, etc.)  The great part is we can use 75% of the rental income as the borrower's income so can help buying power.  If you quesiton is more about the renovation version of it the main benefits are you can purchase a building that is a fixer upper!  The loan is based on the lower of the total cost or the future "improved-value."  We roll the improvement costs into the loan.  This is a great way to buy a building at a discount and house hack!

Update to my initial post…. so everyone is aware, Fannie Mae is allowing 5% down on 2-4 unit residential properties. Main benefits are higher loan limits over FHA, not self-sufficiency test like FHA, and no income limits like 80% AMI (Freddie Max Home Possible). I'm being told we can combine this with our Fannie Renovation Product which is very exciting news! Will know all the details in a few days!!

@Benjamin Sulka just make sure you know the income limits for your area… can’t exceed 80% of the AMI. 

@Devin Ryan I just posted somethig similar... more focused on 2-4 units, but echo your comments.  Great program for those that qualify.  We just rolled out the renovation version of Home Possible and I couldn't be more excited.  5% down with lower MI, and can roll improvement costs into the loan.  Game Changer!!

I want to share this program with the group for those that are not aware of it. Freddie Mac has a program that allows only 5% down on 2-4 units. This is a huge opportunity for savvy home buyers because you can get into a larger building (2-4 units) with less money down. We just got the ability to use this program in conjunction with our renovation loan (Home Choice). This is a huge opportunity as a regular conventional renovation loan requires 15% down on 2-units and 25% down on 3-4 units. You might be asking yourself, why not FHA 203K... as it only asks for 3.5% down. That's true, but the loan limits are lower for FHA, the MI is higher and it is there for life (if you only put down 3.5%). Not to mention, FHA has a self-sufficiency test you must pass on a 3-4 unit. This can be very difficult to pass in states with high property taxes... not to mention the current high rate and high home price market we're experiencing. I'm a firm believer that everyone should have an investor mindset and this product really helps those wanting to get in the RE Investing Game! While this is only for owner occupants the borrower can get gift funds from a parent (must have 3% of their own funds). Think RE Investors wanting to help getting their kids get off to a great start:-) Good luck to all!