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DSCR
The DSCR loan program is a 15%+ down payment loan program for 1-4 unit properties for real estate investors. We analyze the rental income from the property versus the property’s payment.
We want the rental income, as determined by the appraiser’s opinion of market rent, to exceed the housing payment.
For instance, if a property’s market rent is $4,000 a month, we want the property’s total mortgage payment, property tax, and home insurance to be less than $4,000 a month. If they’re roughly equivalent, then the “ratio” is 1.0 (the ratio of the rental income versus payment).
It’s still possible to underwrite a DSCR loan with a .75 ratio. If the rental income is $3,000 and the property payment is $4,000, that’s a .75 ratio. Buyers with lower credit scores will need to put slightly more down, if the property’s ratio is .75-.99 rather than over 1.0.
If the ratio is under .75, that is still possible with a couple parameters, including a larger down payment and additional money in savings.
Why it’s great, who is it for:
DSCR stands out as a great product for buyers because of how the qualifying income is determined. We don’t need to document the buyer’s income outside of the rental income they’ll enjoy from the property. That means we’re not requesting tax returns nor pay stubs & W-2s.
It’s a program especially helpful for clients who own multiple rental properties with losses reported on their tax returns…we don’t review the returns and don’t consider income from properties other than the one being purchashed or refinanced.
Buyers can take ownership of the property in their name or in their LLC.
Keep in mind:
DSCR is just for investors. You can’t use the product to purchase a home! The DSCR product is just for business use.
The maximum loan amount is $3,000,000.
If you wish to own the property in an LLC, we’ll ask for:
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- Certificate of formation
- Filed articles of incorporation, including and all addendums and a current listing of ownership interests.
- Operating agreement
- Current Certificate of Good Standing
Pre-Qualify Now: https://ajaffe.firsthome.com/startapp
ajaffe@firsthome.com 240 – 479 – 7658