DSCR for Section 8… Doable?

Question

Hey guys!

Quick question: can you use a DSCR loan to acquire section 8 housing? If so, what ratio would be necessary? Thanks!

-Nick

Stephanie P. · Answer

@nicholas creahan

You can, but if there is no lease in place at the time of loan origination, the underwriter will take market rent, not the section 8 rent.

@Nicholas Creahan

Alex Bekeza · Answer

@Nicholas Creahan I don't know of any lenders who would discriminate against section 8.  Like @Stephanie P. said, they'll use the lower of actual or long term market rent for the DSCR calculations but depending on what city you're in this is probably not an issue.  There are plenty of options that will allow as low as a 1.0 or even slightly negative DSCR with compensating factors.

Rod Hanks · Answer

Yes, usually 1.2 but it depends on the lender.

DSCR for Section 8… Doable?

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