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

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!