Anyone Actually Using These 40-Year DSCR Loans?
I’ve been looking at these newer 40-year DSCR loans — 10 years interest-only, then 30-year amortization & I’m curious about what other investors think.
On a smaller SFR loan, the savings are definitely not compelling enough to give up 10 years of principal paydown. But on a larger loan, a value-add deal, or across a growing portfolio, I can see the argument for keeping more cash available. It also seems interesting for an improve/stabilize/divest strategy where amortization isn't really where you're expecting to create the value anyway.
My question: Who is actually using these, and what’s your strategy behind choosing interest-only? Portfolio growth? Better DSCR? Value-add? Or are you sticking with traditional amortization? I'd love to hear from some lenders as well as investors - especially anyone who has used one or is entertaining using one -
- Alicia Sierra
