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The Investor Cash Flow mortgage program, also referred to as Debt Service Coverage Ratio (DSCR), allows investors to qualify for a loan based on a rental assessment to determine property cash flow. Suited for new and seasoned real estate investors, this program is key when building a real estate portfolio.
There are over 50 separate investors that offer a version of this program, each with a different set of guideline requirements and thresholds for the program. In many situations, the guideline variance from investor to investor can make a difference in qualifying for the lowest interest rate, which will directly impact cash flow on the property or the difference of not qualifying for the property.
No Ratio Loans
This program is exactly what it sounds like—no rental income is required to qualify. It has been identified as extremely useful for properties where the market rents are not supporting the debt of higher acquisition prices. Very few investors are offering a true no ratio program, and we are one of them.
A type of non-QM loan for real estate investors. DSCR is a measurement of a firm’s available cash flow to pay current debt obligations. Lenders use this program to help qualify real estate investors for a loan because it can easily determine the borrower’s ability to repay without verifying income.
There are two that stand out:
This program requires 20% down.
No, personal income isn’t required to qualify. This means there is no need to submit income statements or tax returns.
A lender will divide your gross rental income by your annual debt to calculate your DSCR; which determines how much income the property generates. Typically, these programs are looking for DSCR of 1%.
Short term rentals (like AirBnB and VRBO) are accepted and rents will be averages over the most recent 12-month period.
Chad Baker
Originating Branch Manager
NMLS #329451
858-353-8331
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Call (858) 353-8331 or fill out the form and we will be in touch quickly!