DSCR Loan to house hack? Will lenders be willing to do it?

Question

Hi there, I am new to real estate investing and am looking to purchase my first home. I recently graduated from college, and thus I do not have anywhere near 2 years of income history. However, my girlfriend of five years and myself both currently have stable incomes and are looking to move in together. Would it be possible to get a DSCR loan if I use my girlfriend as a lessee, then split the payment down the middle between us? I am aware that DSCR mortgages are generally reserved for rental properties rather than owner-occupied, but would a lender be willing to make an exception given my situation?

Thanks!

Robin Simon · Answer

No - this would be mortgage fraud.  DSCR Loans are strictly business purpose only and you need to sign a legal document attesting that you don't live in the property or plan to live in it.

Jonathan Taylor · Answer

@Alex Baur congrats on the creative thinking but DSCR loans strictly prohibit owner occupants. The loan is for business purpose and cannot be used for this purpose. I would keep saving and working while learning. You'll get there.

Brittany Minocchi · Answer

Nope, that's mortgage fraud. There are loans for owner occupied properties that don't require income/employment docs, but you'll need good credit, a hefty down payment and a good chunk of reserves.

Alex Baur · Answer

Thanks everyone for the replies, I figured it was too good to be true. I will explore other options.

Dennis Muno · Answer

Hello Alex,

This is doable. For DSCR loans a lot is not asked for: normally, your credit(660+ gets you good terms and increases chances of financing) and purchase contract, minimum 1 DSCR ratio, as well as enough in your bank account to show for downpayment(usually 20%), closing costs and 6 months PITI reserves(principal& interest, insurance and taxes) will help seal the deal.

Personal income is not looked at for DSCR loans. If both you and your girlfriend have decent FICOs, enough resources for the downpayment(20% down), closing costs and 6 months PITIA reserves you just may have your first DSCR loan to buy a rental property.

Devin Peterson · Answer

Creative thinking. Kudos. DSCR won't ask who your tenant will be if its a purchase. 1007 (rent schedule) will provide the long term rental income used to qualify the loan. Only tough thing I see here is that if you don't own a primary already some lenders may see this as skeptical and raise a flag. GL!

DSCR Loan to house hack? Will lenders be willing to do it?

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