I can't get a DSCR loan

Private Lending & Conventional Mortgage Advice
2yFollow

I can't get a DSCR loan

Becky Hoffman
Investor · Houston, TX · Member since 2020 · 22 posts · 6 votes

I am ready to refinance one of my rentals to pay off the private lender loan I used to purchase it. ($85k) The ONLY thing preventing the loans from being accepted is the square footage of the house. (500 sf) Everything else about the house passes with flying colors! Does anyone have a suggestion on how I can work around this issue?!

2Reply
42 views

Most Popular Reply

Mark MunsonBusiness Member
Lender · Orlando, FL · Member since 2022 · 440 posts · 300 votes
2y

Hi @Becky Hoffman

As others have said, the typical minimum is 600 sqft, but there are certainly lenders out there doing less. Also, you can seek an exception from most DSCR lenders and they get approved at a high rate, it will just come with an increased origination fee (usually .5% for exceptions) or a interest rate add on.

[email protected]407-900-8799
CapSource LLC4.947 Reviews
WebsiteView Page
2Reply
See this reply in the discussion

22 Replies

Jump to latestLatest
  • Charles Carillo
    Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
    2y

    @Becky Hoffman

    Have you tried speaking with any local banks or credit unions? They are more likely to finance properties that vary from the norm.

    1Reply
  • Rick Pozos
    Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
    2y

    Try a different lender. Maybe find a broker who has access to different companies. Someone will lend on the property.

    0Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    2y
    Quote from @Becky Hoffman:

    I am ready to refinance one of my rentals to pay off the private lender loan I used to purchase it. ($85k) The ONLY thing preventing the loans from being accepted is the square footage of the house. (500 sf) Everything else about the house passes with flying colors! Does anyone have a suggestion on how I can work around this issue?!


    How many DSCR Lenders have you talked to? I think generally the square footage minimum for most lenders is around 600 square feet - but typically if everything else is pretty standard could probably be an exception somewhere

    [email protected]
    Harpoon Capital514 Reviews
    WebsiteView Page
    1Reply
  • Gil Wildridge
    Member since 2022 · 35 posts · 16 votes
    2y

    500 SF is pretty small, so that may the reason for other lenders, but I'd try a few different ones or try a credit union if that doesn't work. Have you done DSCR before and are you using the same lender if you did?

    0Reply
  • Becky Hoffman
    OP
    Investor · Houston, TX · Member since 2020 · 22 posts · 6 votes
    2y
    Quote from @Charles Carillo:

    @Becky Hoffman

    Have you tried speaking with any local banks or credit unions? They are more likely to finance properties that vary from the norm.


    I want to do a DSCR loan - I don't think banks will do that kind of loan.

    0Reply
  • Becky Hoffman
    OP
    Investor · Houston, TX · Member since 2020 · 22 posts · 6 votes
    2y
    Quote from @Rick Pozos:

    Try a different lender. Maybe find a broker who has access to different companies. Someone will lend on the property.

    I have tried 4 different lending companies. They all say 700 sf or more. 
    0Reply
  • Becky Hoffman
    OP
    Investor · Houston, TX · Member since 2020 · 22 posts · 6 votes
    2y
    Quote from @Rick Pozos:

    Try a different lender. Maybe find a broker who has access to different companies. Someone will lend on the property.

    I have used 3 different brokers who shopped around for me. Once we get to the size of the house it's a no go. 
    0Reply
  • Mark MunsonBusiness Member
    Lender · Orlando, FL · Member since 2022 · 440 posts · 300 votes
    2y

    Hi @Becky Hoffman

    As others have said, the typical minimum is 600 sqft, but there are certainly lenders out there doing less. Also, you can seek an exception from most DSCR lenders and they get approved at a high rate, it will just come with an increased origination fee (usually .5% for exceptions) or a interest rate add on.

    [email protected]407-900-8799
    CapSource LLC4.947 Reviews
    WebsiteView Page
    2Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Becky Hoffman:

    I am ready to refinance one of my rentals to pay off the private lender loan I used to purchase it. ($85k) The ONLY thing preventing the loans from being accepted is the square footage of the house. (500 sf) Everything else about the house passes with flying colors! Does anyone have a suggestion on how I can work around this issue?!


     Hi Becky, 

    You should call around a few brokers on this one. If you have a strong credit background and reserves, you should be able to get an exception 

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Carlos Scarpero
    Lender · Dayton, OH · Member since 2018 · 118 posts · 19 votes
    2y

    I can do these. Call or text me at 937-572-3713

    1Reply
  • Kristie Laufer
    Member since 2024 · 37 posts · 4 votes
    2y

    Hi Becky! I can ask my partners if they could do this. 

    0Reply
  • David Bilandzija
    Lender · Venice, CA · Member since 2021 · 189 posts · 132 votes
    2y

    Hello Becky, this is doable.  Options are limited but I have a source that can help with permanent financing, i.e. 30 yr fixed, interest only 30 year term.

    0Reply
  • Gary Jurney
    Flipper/Rehabber · Cypress, TX · Member since 2024 · 153 posts · 5 votes
    2y

    Hi Becky! I'm a lender and also a broker who works with multiple lenders. Send me a DM. I might be able to help you with this. 

    0Reply
  • Dylan Martin
    Banker · Member since 2024 · 15 posts · 3 votes
    2y

    I'll echo what a few others have said - if the rest of your application is strong we can probably get it done on an exception basis. Otherwise, we have lenders that specifically allow for "tiny homes" under 600sf. Send me a message if you want to connect there will be some additional info needed to get some terms for you! 

    0Reply
  • Emanuele Mayer
    Lender · Member since 2022 · 72 posts · 19 votes
    2y

    Hello we can get an exception for this issue, let's connect.

    0Reply
  • Becky Hoffman
    OP
    Investor · Houston, TX · Member since 2020 · 22 posts · 6 votes
    2y
    Quote from @Gil Wildridge:

    500 SF is pretty small, so that may the reason for other lenders, but I'd try a few different ones or try a credit union if that doesn't work. Have you done DSCR before and are you using the same lender if you did?

    This is my first DSCR


    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free