DSCR Loans for Investment Properties

If you are an experienced investor or just starting out there are non-traditional ways to acquiring real estate property and enjoy the benefits that rental properties offer investors to build wealth.

What is a Debt Service Coverage Loan?

A DSCR loan is a non-qualified mortgage (Non-QM) loan designed specifically for real estate investors. Instead of the lender verifying income from the borrower to repay the loan they'll use the DSCR to qualify the transaction.

What is a Debt Service Coverage Ratio?

The Debt Service Coverage Ratio is a ratio of the investment property's monthly gross rental income divided by the mortgage payment, including property taxes, insurance. and association dues if applicable.

Example: if the rent for a home is $4,000 per month, the mortgage payment should be less. If it is not less there is a DSCR no ratio program with stricter requirements such as a high down payment and cash reserves.

DSCR loan types include fixed rate, adjustable rate, and interest-only. Loan payment terms are typically offered on 30-year and 15-year periods.

Advantages

• This loan helps investors to obtain the funding they need to purchase or refinance minus traditional income documentation

Interested in a DSCR Investor Loan? Discuss it with a 1stNWM Loan Advisor to understand the DSCR loan program as well as interest rate updates.