DSCR Loan with 25% seller financing

[Vinessa Eisele]

Under contract on a portfolio of 6 properties/14 long term rental units. Seller financing for the 25% down payment. We are hearing that DSCR loans will not accept a 2nd position lien such as seller financing. How do we get around this other than showing proof of personal funds for the 25%??

Thanks!

[Nick Belsky]

@Vinessa Eisele

Interesting negotiating skills.

I have lenders who will allow seconds on DSCR loans, but the "seller financed" part is limited to 15%, whereas the borrower must bring at least 10% of their own funds to the deal. The extra 10% would be split up as 6% max as seller concessions towards closing costs, then the remaining 4% would come off the principal loan amount. I love loans like this. But you need a lender who will work with it. With this lender, the seller is not required to partner with you at all. You will need a contract for the second though.

Sounds to me like you need to find the right lender for this deal.

Cheers!