Tired of traditional debt-to-income limits holding back your real estate goals? Our DSCR loans unlock your next investment by focusing on the property’s potential, giving you the capital to close deals quickly.
Want to know if you qualify for a DSCR loan?
We make it simple for real estate investors to find out if our DSCR loan is the key to unlocking their next investment property. Use the table below to see if you’re on the right track.
| Metric | Guideline |
|---|---|
| Minimum Credit Score | Starting at 620 |
| Minimum Down Payment | As low as 20% |
| Loan Amount Range | $100K to $3M |
| DSCR | Ratios as low as 1.0 considered |
Please note that these are general guidelines. Connect with one of our investor-focused loan officers for a personalized assessment of your unique deal.
Stop letting personal DTI stall your portfolio growth.
You’re a savvy investor, but conventional lenders treat you like a first-time homebuyer. Do these scenarios sound familiar?
- Your personal income and mortgage debt from other existing loans are holding you back. Lenders often scrutinize a borrower’s personal financial situation too heavily, which can prevent you from seizing new investment opportunities.
- You’re tired of the slow underwriting process and endless paperwork that cause you to miss out on competitive investment properties.
- It feels like your lender doesn’t understand your business model or your need for speed.
- Your debt obligations from other successful properties are seen as a liability, not a sign of your expertise.
Understanding a DSCR loan.
A DSCR (debt service coverage ratio) loan is designed specifically for rental property investors. What’s great about a DSCR loan is that it bypasses the need for personal tax returns, W-2s, and complex DTI calculations based on your personal finances. It’s a game-changer for anyone looking to scale their real estate portfolio.
How we qualify your investment property.
We calculate DSCR by comparing a property’s expected rental income and cash flow (NOI) to its monthly loan payments to ensure it can cover the mortgage. Even properties with limited or temporary negative cash flow may qualify with stronger terms. DSCR loans also let you finance multiple income properties without the limits of traditional loans.
Why choose Directions Home Loan for your next investor loan?
We pride ourselves on being a reputable lender. We combine a modern, efficient process with expert human guidance you can’t get anywhere else.
When you choose to partner with us, you get:
A tech-driven process
Our streamlined, digital platform means less paperwork and faster closings. We provide the speed you need to make competitive offers and win deals.
Dedicated experts
You get a dedicated loan officer who understands investment strategy, market dynamics, and how to structure a loan to your advantage. They are your long-term partner for deal after deal.
Unmatched transparency
We provide clear DSCR loan terms and work with you to maximize your cash flow and return on investment.
Sharpen your strategy with insights from our DSCR loan experts
Stay ahead of the curve with our investor resource center.
When to Refinance a Home Mortgage
When to Refinance a Home Mortgage
FHA vs conventional loans: Which option is best for you?
FHA vs conventional loans: Which option is best for you?
Reasons to refinance your home: A comprehensive guide
Reasons to refinance your home: A comprehensive guide
Frequently Asked Questions
Can I qualify for a DSCR loan without providing personal income documentation?
One of the main benefits of DSCR loans is that they focus on the property’s expected cash flow and rental income to determine the borrower’s ability to repay the mortgage loans. This means self-employed individuals and investors with complex personal finances can secure financing based on income-producing properties without traditional tax returns or W-2s.
Can we use gift funds as down payment for DSCR investor loans?
Generally, gift funds are not allowed for DSCR loans because lenders want to know if the borrower has sufficient income and financial stability to manage the loan. However, specific loan agreements may vary, so it’s important to check with your lender regarding their policy on gift funds and minimum loan amount.
What property types are eligible for DSCR loans?
DSCR loans can finance various property types, including single-family rental homes, multifamily units, and some condo hotels allowed by lenders. The property’s performance and rental income will be analyzed to determine loan eligibility and the appropriate DSCR ratio.
How do prepayment penalties and interest rates affect DSCR loans?
Prepayment penalties can apply if you pay off the loan early, as outlined in the loan agreement. Meanwhile, interest rates impact your monthly mortgage payments and overall loan affordability. Understanding these factors is essential to managing your property’s cash flow and making sure the DSCR remains strong enough to cover debt obligations and reduce operating expenses effectively.
What is the minimum DSCR ratio required to qualify for a DSCR loan?
Most lenders require a minimum DSCR ratio of 1.0 to qualify for a DSCR loan, meaning the property’s rental income must at least cover the total annual mortgage debt, including principal, interest, taxes, insurance, and HOA fees. Some lenders may accept ratios slightly below 1.0 with additional conditions, such as a larger down payment or strong overall financial profile. A higher DSCR ratio will improve your chances of loan approval and may result in better loan terms.
Customer Testimonials
Ready to add the next property to your portfolio?
Let’s get started. Our simple process gives you a clear picture of your financing options in minutes. Find out what loan amount you qualify for, and partner with a team that’s as serious about your growth as you are.
