What DSCR lenders look for in Rental Properties

[Erik Estrada]

Consider the following to have an easier time qualifying for DSCR financing:


1. Is the property in a Rural area (typically population sizes under 150,000) 

Most DSCR lenders cannot fund in Rural Areas. If it’s a great opportunity, you might get away with seller financing or a private loan. 

2. Investing Experience 

Most DSCR lenders want to see that you have some experience. No first time home buyers allowed. Pricing typically gets better at 5 properties or more on your Schedule of RE.

3. Is there Comps available for your property? 

If there are very few properties in the area that you are buying in, that are similar in nature, your appraisal could come in lower than expected. And if it's just out of the ordinary, most DSCR lenders will not finance it.


4. Talk to a broker! 

Shopping around is time consuming and you are jeopardizing yourself to the market. Brokers work with wholesale banks and have a strong network of lenders to provide you with the best financing.

[Robin Simon]

Yes - best to find yourself a forward-thinking flexible DSCR lender!

Sharing our perspective on this:

-We do rural typically capped at 70% LTV though

-We don't discriminate at all against 1st time investors/buyers

3. Comps are pretty important - generally we need the top 3 to be within 5 miles and have less than 20% net adjustment

4. Agree - get yourself a good broker that has access to a lot of different lenders, they will typically have access to lower rates and fee waivers