All Forum Posts by: Stacy Raskin

Many lenders will work on a property with Section 8 tenants. A DSCR loan is structured based on the cash flow on the property. So if you're cash flowing on the property after taking into effect the mortgage, taxes, insurance (and HOA) if applicable then that is what is important besides borrower credit and LTV.

More on how DSCR loans work: DSCR loans won't use your income to underwrite the loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable). If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

Happy to connect to discuss further. 

As of this writing, rates are in the 6s and 7s depending on credit, loan to value, prepayment penalty term, having at least a DSCR 1 ratio etc. There are different factors that go into the rate.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate. 

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

5. All other factors being equal (borrower credit score, LTV, etc), a rate will be higher for a cash out refinance compared to a purchase as rates are supposed to measure risk for a lender and there's a bigger risk of default when an investor does a cash out refinance versus doing a purchase.

Happy to connect to discuss further. 

 Thank you Mike- I appreciate it! 

Some DSCR lenders will go down to a $75K value and a $50K loan amount. It's the same work to do a $50K loan as a $900K loan so the fees will be higher due to the loan amount but will still be much lower than what a lender or broker gets paid on a higher loan amount.

More information on how DSCR loans work to help better understand the guidelines and how rates are calculated: DSCR loans won't use your income to underwrite the loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable). If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

Happy to connect to discuss further. 

There are are 20% down payment DSCR options. There are 15% down DSCR options but that will cause the rate to go up so most investors go with the 20% down DSCR option. This is also contingent on the borrower's credit score. These type of loans are for rental properties that don't need significant work and are ready for tenants to be lived in. This is decided on an appraiser marking "as is" on the appraisal form and not "subject to" repairs being done which those items will have to be fixed and the appraiser will have to go back out and do a report addendum and mark the report as "as is." The appraiser also can't say there's health or safety issues in the report.

Hard money is generally used for fix and flip properties as they won't pass the above appraisals and get an "as is" on the report. These loans generally have higher interest rates, shorter loan terms (a year is common) and are more expensive loan products. Generally investors will sell the fixed up property and pay off the hard money loan before a year or they will convert the loan through a refinance to a longer term loan product such as DSCR product.

Some investors use this strategy to cash out refinance the property and take cash out for other projects. There are seasoning periods which are waiting periods from when you have done the last loan. Conventional loans have a longer wait. DSCR loans can be done in 3-6 months of waiting to use the new appraised value. This allows the investor to get more cash out as the assumption is if work has been done on the property, the value will be greater than if it just sat there and appreciated on its own for 3-6 months or more.

Happy to connect to discuss further. 

There are prepayment terms on DSCR loans. Depending on the lender, generally there are options from 6 months or a year to 5 years in one year intervals. So there are some lenders that have 1, 2, 3, 4, 5 prepayment penalty options. Generally the shorter the penalty, the more it impacts on the rate when using the same borrower's credit profile. These options generally vary by state as lenders are licensed state by state. Some states don't allow prepayment penalties on DSCR loans which will also impact the rate. Happy to discuss further.

Get cash out of your investment property, primary or second home easily with online income and property verification

More details:

• Values determined by AVM (automated valuation model), not a full appraisal
• Quick and easy online verification process
• No cash needed at closing except for $150 for states that require an in person notary
• Credits score down to 640 for primary homes and 680 for investment properties
• CLTV are up to 85% for cash out for primary homes and up to 70% for investment properties (max CLTV depends on credit score)
• HELOC maximum line amounts up to $400,000 for primary homes and $250,000 for investment properties (maximum loan to value (LTV) varies based on credit score)
• Only available on one unit properties such as single family residences, condos, planned unit development (PUD) and townhouses.
• Fixed 5-30 year fully amortized loan terms with 2-5 year draw periods. Full draw required at closing. Subsequent draws can be any amount above $500. Additional draw limit is 100% of total line of credit.
• Up to 50% debt to income (DTI). Income can be from earnings or asset depletion. Spousal income can be considered in community property / homestead states. Income verified online through borrower's source of choice such as bank statements, asset accounts, paystubs and IRS tax filing.
• Properties must have been bought at least 90 days ago.
• U.S. citizens or permanent residents. Property must vest as individuals or a revocable trust. LLCs not allowed.
• Fast funding.
• Application must be completed within 14 days.
• Inquire for additional details.

These HELOCs are only for properties located in California or Florida.

I look forward to hearing from you.

Get Cash Out of Your Investment Property with no Personal Income Needed for the Loan

DSCR loans are a great way to supercharge your investment goals and net worth. Depending on the loan program, the mortgage will only be qualified off of your middle credit FICO credit score, down payment and market or actual rents.

Looking to refinance out of your hard money loan?

If you aren't looking to get cash out, you can also refinance out of a shorter term hard money loan or any loan to have a fixed 30 year mortgage term potentially saving on monthly interest payments if refinancing out of a hard money loan.

More details:

• Loans available for cash-out
• For 1-4 units (single family rentals to fourplexes)
• Loans for property appraised at $75,000 and up. Minimum loan amount is $50,000
• Credits score down to 620 (for loans under $100K, middle mortgage credit score is 680). If credit is lower, LTV will be reduced
• Cash out limits depend on property value, credit score and if the property is vacant.
• Non-warrantable condos and condotels permitted for loans above $100K.
• Rate buydown feature available.
• DSCR (lower of gross rent lease or Appraisal Form 1007/216 rent divided by PITIA) as low as 1.0x.
• Short term rentals can be structured off of 12 month short term rental history for loans above $100K.
• Fixed 30 year terms or fixed 40 year terms of 10 years of interest only payments followed by 30 years fully amortized for loans above $100K.
• Inquire for additional details.

I work on DSCR loans in all U.S. states except for Arizona, Idaho, Iowa, Minnesota, Nevada, North Dakota, South Dakota, Oregon and Utah. This list gets updated- please contact for further information.

I look forward to hearing from you.

Looking to Buy or Refinance a Non Warrantable Condo or Condotel?

Non warrantable condos and condotels that are investment properties can be bought or refinanced with DSCR loans. DSCR loans are a great way to supercharge your investment goals and net worth. Depending on the loan program, the mortgage will only be qualified off of your middle credit FICO credit score, down payment (if purchase) and market or actual rents.

Purchase, Rate/Term & Refinance Cash-Out loans:

More details:

• Loans available for purchase, rate and term refinance (no cash out) and cash-out refinance
• Credits score down to 620 for non warrantable condos and 640 for condotels
• LTV are up to 75% for purchase and 70% for cash out.
• Cash out limits depend on property value, credit score and if the property is vacant.
• Loan minimum of $100K
• Rate buydown feature available.
• Ok if under 500 sq foot living space depending on the property and borrower credit score.
• DSCR (lower of gross rent lease or Form 1007/216 rent divided by PITIA) as low as 1.0x.
• For experienced investors (one year of investor experience and own home), short term rentals can be structured off of 12 month short term rental history with 20% expense factor. If a purchase, AirDNA projected rents for the property address with 20% expense factor. Other loan programs don't have home ownership requirement.
• Inquire for additional details.
• I work on condotel DSCR loans in all U.S. states except for Alaska, Minnesota, Michigan, Arizona, Nevada, North & South Dakota, Idaho, Missouri, New Jersey, Vermont, New York, Virginia, Wyoming, Oregon and Utah. For other types of investment properties such as non warrantable condos and 1-4 units, I work on DSCR loans in all states except for Minnesota, Nevada, Arizona, North & South Dakota, Oregon, Utah & Vermont. 
• I look forward to hearing from you.

Get Cash Out of Your Investment Property with no Personal Income Needed for the Loan- Pricing Special- 0.25% off for all loans locked in August

DSCR loans are a great way to supercharge your investment goals and net worth. Depending on the loan program, the mortgage will only be qualified off of your middle credit FICO credit score, down payment and market or actual rents.

If you aren't looking to get cash out, you can also refinance out of a shorter term hard money loan or any loan to have a fixed 30 year mortgage term with a lower rate.

More details:

• Loans available for cash-out and purchase
• Credits score down to 620 (for loans under $100K, middle mortgage credit score is 680). Minimum $75K appraised value needed for a purchase or refinance.
• LTV are up to 75% for cash out.
• Cash out limits depend on property value, credit score and if the property is vacant.
• Non-warrantable condos and condotels permitted for loans above $100K.
• Rate buydown feature available.
• DSCR (lower of gross rent lease or Appraisal Form 1007/216 rent divided by PITIA) as low as 1.0x.
• Short term rentals can be structured off of 12 month short term rental history for loans above $100K.
• Fixed 30 year terms or fixed 40 year terms of 10 years of interest only payments followed by 30 years fully amortized for loans above $100K.
• Loan options in most states.
• Inquire for additional details.

I look forward to hearing from you.