Most HML are interest only, so the payment may not significantly different between IO payments and DSCR,

As for an ARM or IO, if you plan on holding for a long time a 30 year fixed amortized loan at similar if not better rates then you are quoting might make more sense. 

Most deals are DSCR constrained, not necessarily LTV constrained and as such you're seeing lower LTV's on acquisition and refinance so you're getting a lot of IO years with Freddie/Fannie which is great for cash flow. 

With a 30-year amort and 10-year IO options - as well as ability to get rate down quite a bit if you have long-term horizon (5+ years so don't mind prepay) - the rates/terms and monthly payment will likely be very attractive.Others too have done the DSCR Portfolio Loan (Blanket Loan) refinance option too (refinanced the 10 properties that are under conventional into one blanket DSCR Loan and start the process back from 0 on conventional), however, given current rates, don't see it a lot currently since the refinance would typically mean racheting up interest on those

Loan terms are going to vary, based on the asset, your liquidity, net worth.We've got three deals currently under contract with a credit union, 25 yr am, 6.75% rate, 2 years I/O, 5 yr term. 

When I tapped out in March, April and June of '22 I sold all my larger mf on i/o contracts. 

The loan caps vary across lenders, across experience buckets, across asset valuations but 70% - 75% is standard.9mo note at 12.99 i/o - Most say "12" months and then bake in a fee if it goes longer than 9 months.  12.99 is high. 

. $100k performing I/O note for $90k), how do you classify the extra principal you get back when the loan matures?

Hello,You would be correct that the IO loan option would allow the investor more cash flow.

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