SKIP TO MAIN CONTENT
Logo
  • apply online
  • loan programs
    • conventional
    • portfolio
      • 1099
      • asset utilization
      • bank statement
      • bridge loan
      • DSCR
      • foreign national
      • no income
      • non permanent
      • profit loss
      • WVOE
    • va
    • jumbo
    • new construction
    • fha
    • usda
    • reverse mortgage
  • recently funded
  • mcf resources
    • calculate payment
      • annual percentage rate
      • debt consolidation
      • early payoff
      • payment amortization
      • prepayment savings
      • refinance break even
      • rent vs own
      • tax savings
    • market reports
      • 2022 archive
      • 2021 archive
      • 2020 archive
    • portal guide
  • about us
    • contact us
    • management team
    • careers
  • LOAN PORTAL

DSCR

CLICK TO APPLY - PURCHASE
CLICK TO APPLY - REFINANCE

YES, to Real Estate Investors

Overview:

 

  • FICO 620+

 

  • Up to 80% CLTV

 

  • Loan Amounts up to $2.5 Million

 

  • Max Cash-on-Hand $1 Million, No Limit for CLTV <55%

 

  • 40- & 30-Year Fixed, 5/6 & 7/6 ARM terms

 

  • No Income or Employment Verification

 

  • DSCR as low as 0

 

  • Eligible for Non-Permanent Residents and Foreign Nationals (under Foreign National DSCR Program)

 

  • Ownership of any Property within the past 24 Months

 

  • Condotels Allowed

 

  • Easier Approval Process than Traditional Debt-to-Income (DTI) loans

 

  • Work with a Lender that Understands Investment Properties

Frequently Asked Questions (FAQ)

What is a DSCR loan?

 

A debt service coverage (DSCR) loan is one that qualifies borrowers through an investment property’s cash flow rather than the borrower’s income. DSCR loans — also known as investor cash flow loans — are frequently used by real estate investors to qualify for mortgages and buy investment properties.

What is a debt service coverage ratio?

 

The debt service coverage ratio (DSCR) is the ratio of an investment’s net operating income to its total debt service. It is a way of determining whether a borrower has enough cash flow to pay its current debt obligations.

How is DSCR calculated?

 

DSCR can have applications in business, government, and personal finances. Like DSCR loans, this ratio is often used in real estate to determine whether an investment property’s cash flow can cover its mortgage payments.

The higher the DSCR, the better the ratio. A DSCR above 1 means that an investment property has positive cash flow and enough net operating income to cover its debts. A DSCR below 1 means it has a negative cash flow, and not enough income to pay its debts. As a rule, anything above 1.25 is considered a good DSCR.

How do DSCR loans work?

 

When your borrower applies for a mortgage loan, we look at their income to determine how much they can afford as a monthly payment. The key figure examined is the debt-to-income ratio (DTI), which is the percentage of their monthly income that goes toward debt.

But in the case of investment properties, MCF Mortgage offers DSCR loans. Rather than looking at a borrower’s income, we consider the expected monthly rent from the property. And instead of using the DTI to determine eligibility, we look at the DSCR.

If the rental income is more than enough to pay the mortgage payment, then the borrower may qualify. If the rental income does not cover the mortgage payment, we will probably deny the application.

What is required for a DSCR loan?

 

While DSCR loans may not have the exact same requirements as Conventional mortgages, there are still guidelines real estate investors will have to meet to qualify.

Unlike Conventional mortgages, DSCR mortgages are not backed by entities like Fannie Mae and Freddie Mac. Therefore, there are no standardized requirements. However, there are a few things that we will look at.

 

DSCR -- Generally speaking, most lenders require a DSCR between 1 and 1.5 to qualify for a DSCR loan, with the most common minimum requirement being a DSCR of 1.25. We go as low as zero!

Credit score -- Each lender will require a specific credit score, with minimum requirements typically ranging from 620 to 700.  We go down to 620.

Down payment -- Most DSCR loans have a maximum LTV of 80% — you will need a down payment of at least 20% to qualify. We offer LTVs up to 80%!

Cash reserves -- Like other investment properties, DSCR loan lenders require a certain amount of cash reserves, often equal to six months of payments. We only require 3 months of reserves!

Loan amount -- The maximum they can borrow for a DSCR loan depends upon the lender, but many financial institutions offer loans up to $2 million. We offer a maximum of $2.5 million!

Prepayment penalty -- Unlike Conventional loans and typical investment property loans, many lenders charge prepayment penalties on DSCR loans.  We can offer up to 5 years of prepayment penalties!

Property eligibility -- DSCR loans can be used for investment properties with one, two, three, or four units. In certain cases, we have been able to approve up to eight units!

What are the advantages of a DSCR loan?

 

DSCR loans have many advantages including:

 

Different eligibility requirements -- DSCR loans use the rental income from a property, rather than the borrower’s income to qualify. This means that they can buy an investment property even if their income makes them ineligible.

No limit to the number of loans -- There is a limit to how many rental properties a borrower can buy with Conventional mortgages, but they can take out as many DSCR loans as they want.

Quicker closing -- DSCR loans may have quicker closing times than Conventional mortgages because of simplified documentation.

No employment verification -- Because the borrower’s income is not used to qualify for a DSCR loan, there is no employment verification required.

  • licensing
  • privacy policy

ABOUT MCF MORTGAGE

 

We have built a powerful reputation as an outstanding mortgage lender serving the lending needs of real estate professionals, builders, and individual homebuyers and homeowners. As a full-service mortgage lender, we have experienced staff offering expertise in every area of mortgage lending ... from purchase to refinance to construction lending. We provide access to a full range of mortgage sources and all our lending specialists are dedicated to finding the right loan - with the best rates, terms, and costs - to meet their unique needs.

 

Texas Complaint/Recovery Fund Notice

 

Corporate NMLS: 1061701

www.nmlsconsumeraccess.org

Corporate Headquarters

 

3 Bethesda Metro Center, Suite 700

Bethesda, MD 20814

(800) 990-2789 | info AT MCFmortgage.com

ABOUT MCF MORTGAGE

 

We have built a powerful reputation as an outstanding mortgage lender serving the lending needs of real estate professionals, builders, and individual homebuyers and homeowners. As a full-service mortgage lender, we have experienced staff offering expertise in every area of mortgage lending ... from purchase to refinance to construction lending. We provide access to a full range of mortgage sources and all our lending specialists are dedicated to finding the right loan - with the best rates, terms, and costs - to meet their unique needs.

 

Texas Complaint/Recovery Fund Notice

 

Corporate NMLS: 1061701

www.nmlsconsumeraccess.org