DSCR loans...Does the property have to be inside a LLC?

Question

Anyone with experience in the DSCR loan space, I would like to know if all DSCR lenders require the property to be inside a LLC.  I got a quote from a Lender the other day, but they mentioned they can only do the loan with the property inside a LLC.  I appreciate any and all information.

Jack Tulloch · Answer

Shannon - No, not all lenders require DSCR loans to close in an LLC. I would recommend reaching out to a few to find a lender that best fits your needs.

Jonathan Taylor · Answer

@Shannon Reburn Not all DSCR lenders require LLC vesting but more and more of them are. I have lenders who still lend and vest to individuals but you will have more options if you vest in an LLC.

Brayden Hrycko · Answer

Hey @Shannon Reburn,

Not all lenders are created equal. I have done plenty of DSCR without using an llc. Feel free to reach out.

Lawrence Kessler · Answer

No not all lenders require that. I'd be happy to discuss this further if that interests you.

Joseph Chiofalo · Answer

Hi Shannon,

Many lenders will allow you to close the in your personal name on a DSCR loan.

Feel free to reach out with any questions.

Thank you

Nicola Mislinski · Answer

Hey Shannon - property does not need to be in an LLC and can be in your name at closing.  Message me details if you want better numbers on this!

Doug Smith · Answer

I started to answer this before I realized how old the post is, but things have changed since you posted this. It used to be that DSCR loans could only be done in the name of an entity, but later they started, allowing them to natural persons provided they could show that it was for investment purposes and that they owned a property. Recently, however, a couple of lenders have started to allow people to buy homes using the DSCR even if they don’t own a property currently. They do have to show that it is for investment purposes and it has to make sense. For instance, I had a NY attorney that lived in the city, but wanted to buy a duplex in Florida. We currently are closing one for a couple that live in a very high-end school district for a couple more years while their children are attending school. They don’t want to buy their. We were able to make it make sense. The DSCR rules are getting more and more aggressive as time goes on...and the rates are really attractive right now. Sorry to post so late on this, but after I read it, I realize things have changed dramatically. I wish you well in your investment journey.

Anthony Rega · Answer

You can do them both in LLC or personal name.  Some states dont require a license to originate DSCR loans, in those states you will find lenders not licensed saying you have to close in LLC.

Erik Estrada · Answer

You can do a DSCR loan under a personal name as well

Devin Peterson · Answer

A reliable DSCR broker should be able to help you find equally if not more competitive terms on full recourse/ non LLC programs as well.

DSCR loans...Does the property have to be inside a LLC?

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