Dscr loan Co-signer

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Jason Taken
Lender · Chicago, IL · Member since 2021 · 424 posts · 145 votes
1y

They will be on title.

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  • Jason Taken
    Lender · Chicago, IL · Member since 2021 · 424 posts · 145 votes
    1y

    They will be on title.

    2Reply
  • Brandon Croucier
    Lender · Lake Havasu City, AZ · Member since 2024 · 700 posts · 285 votes
    1y

    They’re going to be on the loan.

    I highly recommend just including someone with solid credit in your LLC. That's the best way to do something like this

    1Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    1y
    Quote from @Brandon Croucier:

    They’re going to be on the loan.

    I highly recommend just including someone with solid credit in your LLC. That's the best way to do something like this


    If an LLC has multiple properties, wouldn't that get funky adding someone for one property to an LLC?

    0Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 673 votes
    1y
    Quote from @Theresa Rivard:

    If I have a cosigner for Dscr loan, do they have to be on the deed or just the loan?

    What are you trying to do?
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  • Theresa Rivard
    OP
    Member since 2024 · 16 posts · 5 votes
    1y

    Well. I have been struggling to get any kind of loan/funding. So the lender I had been dealing with said I needed a cosigner,  even though it was Dscr loan. But then lender said the cosigner had to be on deed as well. But I told him I didn't think that was true.  I needed confirmation on this

    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    1y

    I’m doing this right now. Just get the loan with the co-signer then quit claim it later to get them off.

    2Reply
  • Theresa Rivard
    OP
    Member since 2024 · 16 posts · 5 votes
    1y

    Yea that was my plan but the lender didn't understand that the cosigner doesn't go on the deed. But he asked around and finally came back and said this morning ok er can do this. 

    thanks for the responses

    1Reply
  • Michael HigginsBusiness Member
    Lender · NY · Member since 2024 · 8 posts · 1 vote
    1y

    Seems like you're dealing with someone who is inexperienced. 

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Theresa Rivard:

    If I have a cosigner for Dscr loan, do they have to be on the deed or just the loan?


     If I am cosigning a loan I would want to be on the deed. Also if I was cosigning I would have a separate agreement with this person to make sure I could easily take every asset they have in case this loan defaults. 

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  • Connor Hibbs
    Lender · Ellington, CT · Member since 2024 · 210 posts · 103 votes
    1y

    If they're a cosigner then they'll be on title, and if this is closing under and LLC then they should also be on the operating agreement.

    1Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y

    Why would you need a cosigner on a DSCR loan? Do they have a higher credit score? Cash reserves?

    Typically if there is a co-borrower involved lenders are going to use the lowest credit score to qualify. 

    If the co borrower is less than 51% owner in the entity, some lenders will require a credit check, but won't use their score unless its less than the minimum qualifying score to get the loan approved. Others will not require a credit check at all, if there is 1 PG on the loan, owning more than 21% of the entity. 

    But will just depend on what you are trying to establish. You can close in an LLC and that would pretty much help you get the better credit score and not have the borrower on title (only the entity). They will still be on the hook for the loan though.

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y
    Quote from @Joe S.:
    Quote from @Brandon Croucier:

    They’re going to be on the loan.

    I highly recommend just including someone with solid credit in your LLC. That's the best way to do something like this


    If an LLC has multiple properties, wouldn't that get funky adding someone for one property to an LLC?


    Most lenders will want to see the original operating agreement if it's an older entity to prevent the borrower from adding someone on the operating agreement to qualify for the loan. There will typically be a seasoning requirement if the operating agreement is new, unless the entity never had one to begin with. These is where DSCR lending gets murky as there are some lenders that don't even care about this. Some lenders do not even verify if the operating agreement is stamped and approved. Definitely none of my business to give any legal advice however, in respect to qualifying for a DSCR loan and using an entity, this is what I have seen.

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  • Jason Taken
    Lender · Chicago, IL · Member since 2021 · 424 posts · 145 votes
    1y
    Quote from @John Morgan:

    I’m doing this right now. Just get the loan with the co-signer then quit claim it later to get them off.


     No.

    0Reply
  • Theresa Rivard
    OP
    Member since 2024 · 16 posts · 5 votes
    1y

    Chris Seveney, she does not want to be on the deed. But we are setting things up legally for her to take all that she needs in the event of something happening such as if I die or something. But the goal is to re-finance within a yr to take her off the loan.

    0Reply
  • Theresa Rivard
    OP
    Member since 2024 · 16 posts · 5 votes
    1y

    Michael Higgins that’s what I was worried about!

    0Reply
  • Theresa Rivard
    OP
    Member since 2024 · 16 posts · 5 votes
    1y
    Quote from @John Morgan:

    I’m doing this right now. Just get the loan with the co-signer then quit claim it later to get them off.


     Does the lender have any say in this?

    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    1y
    Quote from @Theresa Rivard:
    Quote from @John Morgan:

    I’m doing this right now. Just get the loan with the co-signer then quit claim it later to get them off.


     Does the lender have any say in this?

    My loan officer told me to quit claim it over later if I wanted. I’m buying a property with my son as the primary. I’m the co-signer and might deed it over later. 
    0Reply
  • Theresa Rivard
    OP
    Member since 2024 · 16 posts · 5 votes
    1y

    Thank you, that's good to know!

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

    @Theresa Rivard Typically, to qualify as a guarantor for a DSCR loan you will need to own at least 20% of the borrowing entity on title. They'll be on the loan docs as the personal guarantor.

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  • Theresa Rivard
    OP
    Member since 2024 · 16 posts · 5 votes
    1y

    Thank you

    0Reply
  • Theresa Rivard
    OP
    Member since 2024 · 16 posts · 5 votes
    1y

    Erik Estrada I had a 786 credit score. It has gone down some because cple have run my credit and they told me to pay off my bills so those have brought it down some. But I am still over 760.But they told me because I am not a previous home owner? 

    0Reply
  • Theresa Rivard
    OP
    Member since 2024 · 16 posts · 5 votes
    1y

    Alex Bekeza I have the 20%

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

    If in an LLC just on the loan

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y
    Quote from @Theresa Rivard:

    Erik Estrada I had a 786 credit score. It has gone down some because cple have run my credit and they told me to pay off my bills so those have brought it down some. But I am still over 760.But they told me because I am not a previous home owner? 


    You can be a first time home buyer and be able to qualify for a DSCR loan. That guideline is lender specific, so I would suggest shopping it around.

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  • Stephen CacedaBusiness Member
    Lender · 33014 · Member since 2018 · 29 posts · 7 votes
    1y

    Sounds like the issue is the lender you are working with does not allow first time home buyers for DSCR. Adding a co-signer is an option but know that there are options for lenders that allow DSCR for first time homebuyers. I work with a lender that allows that as long as we can document some explanation that the borrower doesnt plan on occupying the home as a primary residence. One example is a had a client renting and working in Miami but wanted to purchase a rental in Orlando near the parks. It was obvious the client was not going to commute from Orlando to Miami for work. The lender approved it no problem with 20% down.

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