(443) 604-7456 | bbarrow@jbmgcapital.com
(443) 604-7456 | bbarrow@jbmgcapital.com
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DSCR loans offer a highly flexible financing option for real estate investments, focusing on the income generated by the property rather than the borrower’s personal income. No income verification and no employment required. These loans support various property types, including single-family homes, multi-unit properties with two to four units, and both warrantable and non-warrantable condominiums. PadSplit homes, Co-Living houses, Sober Living homes, and Half Way houses are available as well. For larger-scale investments, commercial properties with five to eight units are also eligible, broadening opportunities for investors.
Apply NowA key aspect of DSCR loans is their focus on the property’s cash flow. Borrowers can finance up to 85% of the property's value, with a maximum loan-to-value (LTV) ratio set at 85%. That means only 15% down payment vs. the traditional 20% down payment. These loans are fixed-rate, offering predictable payments, with no minimum loan amount! No minimum loan amount! DSCR loans under $75,000 and DSCR loans under $100,000. Credit score requirements vary: the minimum score for general DSCR loans is 600, while short-term rental DSCR loans require a score of at least 660. Flexible prepayment options further enhance their appeal, although prepayment penalties are typically part of the terms they vary by lender and state. We offer DSCR loans with no prepayment penalty as well. We also have DSCR loans for first time home buyers. Most lenders do not.
No minimum DSCR ratio! No-Ratio DSCR loans also! Most lenders requier a minimum DSCR of 1.0, JBMG offers no minimum DSCR ratio and No-Ration DSCR loans.
Maximum LTV ratio of 85%, borrowers can finance up to 85% of the property's value. That is a 15% down payment!
DSCR loans with no minimum loan amount! DSCR loans under $75,000! DSCR loans under $100,000!
DSCR loans up to $20,000,000!
General DSCR loans: Minimum credit score of 600.
Short-term rental DSCR loans: Minimum credit score of 660.
A good Debt Service Coverage Ratio reflects the property’s ability to generate sufficient income to cover its debt obligations. A DSCR of 1.0 represents the breakeven point where income matches expenses, while a DSCR above 1.2 is considered strong for residential investments. This indicates that the property generates 20% more income than required, providing financial stability and often leading to better loan terms. Investors should aim for a DSCR above 1.2 for sustainable and secure investments.
The location of a property significantly impacts its eligibility for a DSCR loan. Loan terms and criteria can vary depending on state-specific regulations. Properties in high-demand urban areas often have stricter requirements than those in rural settings. Economic factors such as local employment rates and rental demand also influence eligibility and loan terms. Additionally, tax incentives or regional advantages may play a role in determining a property's viability for investment.
To calculate the Debt Service Coverage Ratio, divide the property’s rental income by its total mortgage payments, including escrows. For example, if an investment property generates $100,000 in rental income and the annual mortgage payment is $80,000,the DSCR would be 1.25. This means the property generates 25% more income than needed to cover debt payments, providing a comfortable financial buffer for investors.
Prepayment penalties are a common feature of DSCR loans, although they often come with flexible terms. These penalties depend on lender-specific guidelines and state regulations, allowing borrowers to choose terms that align with their financial plans.