All Forum Posts by: Stacy Raskin

@Becky Frempter, there are lenders who have a 0 seasoning period with a DSCR loan if you have significant documented improvements with receipts spent on work done and before and after photos. The lenders will lend on the new appraisal amount. Other lenders require a 3 month seasoning period if significant rehab work was done to use the new appraisal value for the cash out LTV. In contrast, conventional loans will require a longer seasoning period- usually six months.

DSCR loans won't use your income to underwrite the loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

 @Shuvrajit Mukherjee, you can get a DSCR loan without closing in an LLC if an investment property.

What kind of loan are you looking for- Hard money to do the renovation or a long term investment property loan to refinance into once the renovation is done and you are ready to rent it?

I work with lenders that go down to a middle mortgage FICO score of 620 (no late mortgage payments or loan modifications) for loan amounts $100K and over. These programs are available in most states. Credit will affect max LTV for cash out and rate.

DSCR loans are a great way to supercharge your investment goals and net worth. Depending on the loan program, the mortgage will only be qualified off of your middle credit FICO credit score, down payment and market or actual rents.

If you aren't looking to get cash out, you can also refinance out of a shorter term hard money loan or any loan to have a fixed 30 year mortgage term.

More details:

• Loans available for cash-out
• Credits score down to 620 (for loans under $100K, middle mortgage credit score is 680)
• LTV are up to 75% for cash out.
• Cash out limits depend on property value, credit score and if the property is vacant.
• Non-warrantable condos and condotels permitted for loans above $100K.
• Rate buydown feature available.
• DSCR (lower of gross rent lease or Appraisal Form 1007/216 rent divided by PITIA) as low as 1.0x.
• Short term rentals can be structured off of 12 month short term rental history for loans above $100K.
• Fixed 30 year terms or fixed 40 year terms of 10 years of interest only payments followed by 30 years fully amortized for loans above $100K.
• Inquire for additional details.

I work on DSCR loans in all U.S. states except for Minnesota, Nevada, North Dakota, Oregon, South Dakota and Utah. I look forward to hearing from you.

DSCR loans are a great way to refinance out of your hard money loan to fixed 30 year or 40 year long term financing. Depending on the loan program, the mortgage will only be qualified off of your middle credit FICO credit score and market or actual rents.

Program highlights:


• Get up to 75% of the cash you paid for the property. If improvements were made, the lender will consider based on the work done and work receipts to get more of the money you put back then the 75% purchase price. Some exceptions have been made for using the new appraisal value if considerable work done and reflected on new appraisal value and remodeling receipts. If greater than 6 months since the hard money loan, the lender will consider the new appraisal as the maximum LTV.
• Loans available for cash-out or rate and term.
• Credits score down to 620
• LTV are up to 75% for cash out.
• Cash out limits depend on property value, credit score and if the property is vacant.
• Non-warrantable condos and condotels permitted.
• Rate buydown feature available.
• DSCR (lower of gross rent lease or Appraisal Form 1007/216 rent divided by PITIA) as low as 1.0x
• Non-owner occupied Single Family, Multi Family up to 4 unit property types
• Purchase Loan Amount – from $150K to $3,000,000. Exceptions can be made below and above- loans with the details in this post don't go below $100K.
• Fixed 30 year full amortized loan terms as well as 40 year fixed rate with 10 year interest only period then a 30 year fully amortized mortgage.

I work on DSCR loans in all U.S. states except for Minnesota, Nevada, North Dakota, Oregon, South Dakota and Utah. For loans being refinanced before 6 months since refinance or purchase, additional state restrictions apply. Inquire for additional details. I look forward to hearing from you.

FHA loans are underwritten by an algorithm unless they turn into a manual underwrite. The loans follow guidelines that are uniform across lenders. FHA loans generally require two years of employment unless you recently graduated school that helped you prepare for your current employment.

The FHA does allow gaps in employment. You may be granted an exception if, during the previous two years, you have been a full-time student, active-duty military member, on medical leave or staying home to take care of children. The only rule is that the borrower must prove they were fully employed for six months before the FHA case number was first assigned.

If you have a gap in employment, you may have to show proof of full employment for two years prior to this gap. Any gaps in employment that are longer than a month may have to be explained and documented where possible so that the lender can accurately assess and verify the information.

FHA loans also look at your DTI. Front-End DTI Front-end DTI only includes housing-related expenses. This is calculated using your current monthly mortgage or rent payment, including property taxes and homeowners insurance as well as any applicable homeowners association dues.

Back-End DTI Back-end DTI includes all your minimum required monthly debts. In addition to housing-related expenses, back-end DTIs include any required minimum monthly payments your lender finds on your credit report. This includes debts like credit cards, student loans, auto loans and personal loans. Your back-end DTI gives the lender a more complete picture of your monthly spending.

@Melissa Paul, we can fund on a DSCR loan down for investment properties to a $75K appraised value amount and a $50K loan amount.

More details: 

Loan amount: $50,000 - $2MM

Up to 80% acquisition financing

Debt refinancing up to 80% LTV

Cash-out refinancing up to 75% LTV

Term: 30 years fixed

Financing in your name or LLC

No fees upfront.

680 minimum middle mortgage FICO score. 

We fund across the country except for MN, ND, NV, OR, SD, UT, VT for loan amounts under $100K. 

I'll send you a message as well. 

I'm a mortgage broker and also an ADU specialist (had to take a class and pass an exam for the certification). I have a list of wholesale lenders that I work with that fund investment property loans across the country and owner occupied and investment properties in California and Florida. I'll send you a DM as well.

Hard money rates are going to generally be amongst the highest compared to conventional loans, DSCR loans etc.

I've seen borrowers get hard money lower rates for a combination of the below:

1. Having lower LTV

2. Having an exceptional high credit score

3. Having an extensive amount of recent rehab experience.

Generally with all that, rates are still going to be in the 11-13% rang minimum since rates are partially a measure of risk for the lender and also how much they can get on a return on their investment compared to parking it somewhere else.