DSCR LOANS
What is a DSCR Loan?
DSCR loans, also referred to as rental property loans or income property loans, are specialized mortgage loans tailored for real estate investors who earn rental income from their investment properties. These loans are designed to accommodate the unique needs and financial situations of individuals or entities involved in property investment. DSCR loans offer financing options that are specifically structured to align with the cash flow generated by rental properties.
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Who is eligible for DSCR Loan?
DSCR loans are typically for Rental property owners, whether they own residential or commercial properties, are eligible for
DSCR loans. These loans are specifically designed for individuals who generate rental income from their investment properties. Whether you own a single-family home, a multi-unit residential building, or a commercial property, property income loans provide financing options tailored to the unique needs of rental property owners.
Features
✔Cash Flow Consideration:
DSCR loans focus on the property's income potential and the borrower's ability to generate sufficient rental income to cover the mortgage payments.
✔Debt-Service Coverage Ratio (DSCR):
Lenders analyze the property's DSCR, which measures the property's ability to generate enough income to cover the mortgage expenses. A DSCR of 1.0 or higher is generally desired, though there are products that don’t have a minimum DSCR requirement.
✔Loan-to-Value (LTV) Ratio:
The LTV ratio represents the loan amount compared to the property's appraised value. Lenders may have specific LTV requirements for property income loans.
