How does Property Type affect DSCR Loan Pricing (Interest Rate and Terms)?

[Robin Simon]

🤔How does Property Type affect DSCR Loan Pricing (Interest Rate and Terms)?
➡️Standard single-family residences (SFRs) are priced most favorably for DSCR Loans (i.e. lowest rates and least restrictions). These are the most common and easily valued type of residential property. SFRs have the most robust market values because they have by far the largest potential pool of buyers among all DSCR Loan-eligible property types by far. The number of people that are interested (and qualified) to buy a single-family residence includes the vast majority of the overall property buying market: people intending to occupy the property.

DSCR Loans secured by condo units also get slightly worse rates and terms than loans secured by single family residences for the same reason: generally, there is a much larger market for detached SFRs than condo units within buildings.

The logic continues "up the spectrum," with worse pricing (rates and terms) and more potential restrictions (i.e. LTV maximums) for DSCR Loans secured by properties the further it differs from the classic detached single-family residence.

Additional Factors for Best Rates and Terms for DSCR Loans: LLPAs and Overlays
https://harpooncapital.com/dscr-loans-guide/additional-factors-for-best-rates-and-terms-for-dscr-loans-llpas-and-overlays

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