All Forum Posts by: Stacy Raskin

There are lenders that will do no seasoning if a substantial rehab was done and can use the new appraised value for a DSCR loan. If the lender doesn't consider the rehab substantial enough, there are some lenders that will do a cash out refi for what you bought the property for plus the money you put in and have receipts for supplies and labor for the rehab with no waiting period. Otherwise, if you want the new appraised value used for the cash out refinance, generally looking at 3-6 months of waiting or seasoning of the loan.

There are lenders that will do no seasoning if a substantial rehab was done and can use the new appraised value for a DSCR loan. If the lender doesn't consider the rehab substantial enough, there are some lenders that will do a cash out refi for what you bought the property for plus the money you put in and have receipts for supplies and labor for the rehab with no waiting period. Otherwise, if you want the new appraised value used for the cash out refinance, generally looking at 3-6 months of waiting or seasoning of 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? Is your DSCR ratio greater than 1-meaning are you cash flowing. 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.

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.

@Ashish Wa, 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? Is your DSCR ratio greater than 1-meaning are you cash flowing. 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.

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.

There are lenders that lend on condotels and nonwarrantable condos. I'll send you a message to get more information.

@Christopher Mooney, the 401K loan will probably give you the better rate and terms but I would check on the terms for your 401K loan compared to a HELOC.

For the purchase and rehab, there are lenders that will work with investors that want to do rehabs with any level of investor experience where the middle mortgage credit score as low as 660. The lenders with lend on non-owner occupied single family and multi family up to 4 units. For newer investors, the lenders will lend on a 75-80% of purchase price (so the buyer/borrower comes in with a 20-25% down payment) and 75-80% of construction loan amount with maximum after repair value LTV 70%. They offer up to 12 month interest only payments.

Your exit plan at that point (or before the 12 months are up) is to finance into a longer term loan if it's going to be a rental such a DSCR loan if you're looking to do a BRRR.

These lenders also do DSCR loans.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. Are you cash flowing the property? Is your DSCR ratio greater than 1-meaning are you cash flowing. 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.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

This property cash flows.

Lenders will generally let the DSCR loan be vested in an LLC or individually but most lenders want the rehab loan in an LLC's name.

@Michael Lightwood, there are lenders that will work with investors who do fix and flips with any level of investor experience where the middle mortgage credit score as low as 660. The lenders with lend on non-owner occupied single family and multi family up to 4 units.The lenders will lend on a 80% of purchase price (so the buyer/borrower comes in with a 20% down payment) and 100% of construction loan amount with maximum after repair value LTV 70%. They offer up to 12 month interest only payments.

Your exit plan at that point (or before the 12 months are up) is to sell the property of finance into a longer term loan if it's going to be a rental such a DSCR loan.

These lenders also do DSCR loans.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. Are you cash flowing the property? Is your DSCR ratio greater than 1-meaning are you cash flowing. 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.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

This property cash flows. 

Most lenders will vest DSCR loans in an LLC or individually. Generally, fix and flip loans require an LLC for vesting.

@Tyler Noyes, it's good to do your research as DSCR loans aren't regulated the same way as federally backed loans like conventional loans, FHA and VA loans. You want to make sure that the lender isn't going to change the terms on you midway through the process.

In case helpful for more on info on DSCR loans-they 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? Is your DSCR ratio greater than 1-meaning are you cash flowing. 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.

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.

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 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 generally 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 Arizona, Idaho, Iowa, Michigan, Minnesota, Nevada, North Dakota, Oregon, South Dakota and Utah. Inquire for additional details. I look forward to hearing from you.

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
• 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 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.
• Fixed 30 year terms or fixed 40 year terms of 10 years of interest only payments followed by 30 years fully amortized.
• Inquire for additional details.

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