Any 10-15% DSCR Loans?

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Robin SimonBusiness Member
Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
3y
Quote from @Dustin Sanders:

I'm looking for DSCR loans in the 7s or 8s with no balloon payments. I'm ok with prepayment penalties before 3 or 5 years.

The property or properties will be in Florida and/or Alabama.

Does any lenders offer these DSCR loan terms?


 10% is not going to exist, 15% still does currently, but it will be very hard to make work considering the current environment.  Will the properties cash flow at 85% with a rate in the 8s?  If so (very rare deal!) - then you should be able to make a 15% work if you have solid credit

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  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    DSCR loans are 30 year loans.

    2Reply
  • Dustin SandersBusiness Member
    OP
    Realtor · Pensacola, FL · Member since 2019 · 89 posts · 29 votes
    3y

    @Eliott Elias thanks! Do you know of any lenders offering 10% or 15% down for DSCR loans in the 7-8% interest rates?

    [email protected]850-529-3683
    0Reply
  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    3y

    @Dustin Sanders Unfortunately, I will be shocked if you find this. 20% down is hanging on by a thread based on where rates are at and the general anxiety over declining real estate values. 20% down is the minimum I'm seeing. Rates fall off a cliff if you go 25% down. I'm registered with the the vast majority of notable nationwide DSCR lenders. Very few allow any subordinate financing below their note but I do have ONE that allows 90% CLTV (they loan 75% and allow you to secure a 15% seller carryback as long as you come in with 10%). Figure rates are significantly higher doing this instead of the more straight forward approach.

    It would be very difficult to find anything in Florida that cash flowed at 90% leverage though.  (insurance kills)

    [email protected]818-606-8823
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    4Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    3y
    Quote from @Dustin Sanders:

    I'm looking for DSCR loans in the 7s or 8s with no balloon payments. I'm ok with prepayment penalties before 3 or 5 years.

    The property or properties will be in Florida and/or Alabama.

    Does any lenders offer these DSCR loan terms?


     10% is not going to exist, 15% still does currently, but it will be very hard to make work considering the current environment.  Will the properties cash flow at 85% with a rate in the 8s?  If so (very rare deal!) - then you should be able to make a 15% work if you have solid credit

    [email protected]
    Harpoon Capital514 Reviews
    WebsiteView Page
    7Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    3y

    Here is the wholesale rate range at 85% loan to value. 300K purchase price using Jacksonville as the property's city. With no points to the lender, the rate would be 9.99% with a principal and interest payment of $2165. Add another $300 or so for taxes and insurance and you're at $2465 PITI. If you can get over $2500 per month in Jacksonville on a 300K property, good luck, but if you can, that loan is out there. Add 2 points and a processing fee for the broker an underwriting fee for the lender and various and sundry closing costs and you're golden.

    2Reply
  • Timothy Hero
    Lender · United States · Member since 2020 · 1k+ posts · 499 votes
    3y

    All my lenders are 30-year in the mid 7's.

    0Reply
  • Patrick Penner
    Lender · Member since 2023 · 1 post · 0 votes
    3y

    There are investors with 15% down options for DSCR, just need to make sure the property can debt service itself. Interest rates are going to vary based on credit, LTV and debt service of the property.

    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    3y

    @Dustin Sanders 20% down everywhere.

    0Reply
  • Jim Duncan
    Banker · Tampa, FL · Member since 2023 · 39 posts · 19 votes
    3y

    @Dustin Sanders We have a couple of options that can still do a 15% on DSCR, but as Stephenie eluded to above, everything else has to sort of line up in a perfect scenario to make it work. And, even then, hitting your rate target would still be extremely challenging unless you were paying points up front, in which case it would probably make more sense to just try to put in a bigger down payment (or pay down the balance if refi) instead and get better terms naturally offered at the lower LTV. That said, most of our DSCR options have had rates drop over the past few days, so right now is probably a good time to move forward (at an 80% or 75% LTV) as it is very possible to get you rates in the 8s and even low 7s right now at those LTVs, if your credit and DSCR ratio are good.

    0Reply
  • Simmy AhluwaliaPro Member
    Lender · Atlanta, GA · Member since 2015 · 1k+ posts · 200 votes
    3y

    85% LTV is available with at least a 710 FICO and 1.1-1.2x DSCR (not every state though).

    1Reply
  • Leonard Rybak
    Rental Property Investor · MD · Member since 2018 · 62 posts · 29 votes
    2y
    Quote from @Alex Bekeza:

    @Dustin Sanders Unfortunately, I will be shocked if you find this. 20% down is hanging on by a thread based on where rates are at and the general anxiety over declining real estate values. 20% down is the minimum I'm seeing. Rates fall off a cliff if you go 25% down. I'm registered with the the vast majority of notable nationwide DSCR lenders. Very few allow any subordinate financing below their note but I do have ONE that allows 90% CLTV (they loan 75% and allow you to secure a 15% seller carryback as long as you come in with 10%). Figure rates are significantly higher doing this instead of the more straight forward approach.

    It would be very difficult to find anything in Florida that cash flowed at 90% leverage though.  (insurance kills)


     Hey Alex, does this still hold true about minimum 20% down for dscrs

    0Reply
  • Katie Smith
    Member since 2023 · 348 posts · 190 votes
    2y
    Quote from @Leonard Rybak:
    Quote from @Alex Bekeza:

    @Dustin Sanders Unfortunately, I will be shocked if you find this. 20% down is hanging on by a thread based on where rates are at and the general anxiety over declining real estate values. 20% down is the minimum I'm seeing. Rates fall off a cliff if you go 25% down. I'm registered with the the vast majority of notable nationwide DSCR lenders. Very few allow any subordinate financing below their note but I do have ONE that allows 90% CLTV (they loan 75% and allow you to secure a 15% seller carryback as long as you come in with 10%). Figure rates are significantly higher doing this instead of the more straight forward approach.

    It would be very difficult to find anything in Florida that cash flowed at 90% leverage though.  (insurance kills)


     Hey Alex, does this still hold true about minimum 20% down for dscrs


    Hey Leonard, there are lenders that will do 15% down for DSCR loans. You will need to have qualifying credit and the DSCR will also need to work with the interest rate.

    0Reply
  • Shane Kluiter
    Lender · Grand Rapids, MI · Member since 2024 · 10 posts · 5 votes
    2y

    85% LTV is possible in the right situation. Most of the time properties don't DSCR with only 15% down.
    You could do a bridge for 24 months. Then you'd be in the interest only payments with a balloon, which you are trying to avoid. But it would give you time to save up for the 20% on a refinance in 2 years or give you the ability to use any equity gained to refinance in 2 years.

    0Reply
  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    2y

    @Leonard Rybak 80% LTV is the highest we're doing on DSCR. I'm not sure who is buying that paper at 85% but I hear its out there somewhere.

    [email protected]818-606-8823
    Investor Property Loan5306 Reviews
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    0Reply
  • Zach Wain
    Scottsdale, AZ · Member since 2019 · 435 posts · 248 votes
    2y

    Considering most homes will not cash flow with 20% or less down, plan on 20% and most likely 25% down required - depending on the cash flow expectations.  If you can go conventional, go that route first.

    2Reply
  • Joseph Chiofalo
    Banker · Henderson, NV · Member since 2023 · 317 posts · 74 votes
    2y

    Hi Dustin, 

    There are DSCR loan programs for investors that go up to 85% financing on a 1-4 unit property.

    Our group works with a lot of investor buyers in both locations you mentioned.  

    Do have a property in mind?

    0Reply
  • William C. Wilson
    Member since 2024 · 8 posts · 3 votes
    2y

    I have a source (depending on credit score) that can do a 90% LTV DSCR loan on non-owner occupied real estate. Really simple process to get a term sheet and no upfront fees except appraisal cost that is paid DIRECTLY to the appraisal company. Let me know if I can be of assistance.

    2Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    2y
    Quote from @Alex Bekeza:

    @Leonard Rybak 80% LTV is the highest we're doing on DSCR. I'm not sure who is buying that paper at 85% but I hear its out there somewhere.


    Yes - and even when its out there its typically impossible to qualify (need high rate and high DSCR and typically would have to qualify as a LTR - so almost a unicorn or in a really bad market)

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    1Reply
  • Charlie GonzalezPro Member
    Lender · Charlotte, NC · Member since 2023 · 70 posts · 10 votes
    2y

    Hi Dustin,

    I can do 15% down on SFR DSCR properties. And 20% down for 2-4 unit DSCR. Rates are in the 7-8% range. I'd be happy to help you out. Please feel free to message me and I can give you rate quotes.

    0Reply
  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    2y

    You can do 15% down if the DSCR is 1.26 or greater . What is the scenario looking like ?

    0Reply
  • Trent Jones
    Lender · Sea Girt, NJ · Member since 2024 · 14 posts · 0 votes
    2y
    Quote from @Dustin Sanders:

    I'm looking for DSCR loans in the 7s or 8s with no balloon payments. I'm ok with prepayment penalties before 3 or 5 years.

    The property or properties will be in Florida and/or Alabama.

    Does any lenders offer these DSCR loan terms?


    Dustin, just sent you a message. Happy to help with any DSCR questions.

    0Reply
  • Joe Gendy
    Member since 2024 · 2 posts · 0 votes
    1y
    Quote from @William C. Wilson:

    I have a source (depending on credit score) that can do a 90% LTV DSCR loan on non-owner occupied real estate. Really simple process to get a term sheet and no upfront fees except appraisal cost that is paid DIRECTLY to the appraisal company. Let me know if I can be of assistance.

    Hi Na,


    Very interested in this source. If you can put me in contact that would be great, thanks!
    0Reply
  • Kayce Tackett
    Rental Property Investor · Irmo, SC · Member since 2018 · 40 posts · 18 votes
    1y
    Quote from @William C. Wilson:

    I have a source (depending on credit score) that can do a 90% LTV DSCR loan on non-owner occupied real estate. Really simple process to get a term sheet and no upfront fees except appraisal cost that is paid DIRECTLY to the appraisal company. Let me know if I can be of assistance.


    Hi Na, I'd love to hear more about your source if they're still able to do a 90% LTV DSCR.

    0Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    1y
    Quote from @Kayce Tackett:
    Quote from @William C. Wilson:

    I have a source (depending on credit score) that can do a 90% LTV DSCR loan on non-owner occupied real estate. Really simple process to get a term sheet and no upfront fees except appraisal cost that is paid DIRECTLY to the appraisal company. Let me know if I can be of assistance.


    Hi Na, I'd love to hear more about your source if they're still able to do a 90% LTV DSCR.


     I would tread very very carefully here

    [email protected]
    Harpoon Capital514 Reviews
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    0Reply
  • Deborah Wodell
    Lender · Sanford, NC · Member since 2024 · 348 posts · 116 votes
    1y

    Achieving a DSCR loan with just 15% down is challenging in the current market. While some lenders may offer it, these scenarios often require near-perfect alignment of high DSCR ratios (1.2x+), excellent credit, and property cash flow projections that are difficult to meet with this leverage. Rates in this range are also typically higher, making it tough to achieve viable cash flow.

    A more practical and attainable option would be 20-25% down. With this structure, lenders can offer more favorable terms, including lower interest rates, making your investments more profitable in the long run.

    1Reply
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