The Debt Service Coverage Ratio Loan
The Debt Service Coverage Ratio loan is a great option for investors who want a speedy solution when buying properties.
This non-prime loan is fairly straight forward because the property is used to qualify itself. Basically an appraisal is done providing a value and also rental comps. The rental comparables need to support the monthly payment of the DSCR mortgage.
The investor does not need to show tax returns or a history of purchasing properties like a fix and flip loan. They are also able to finance up to 20 properties this way.
Remember, this is a Non-Prime loan
The DSCR loan is a non-prime loan so pricing will be a little higher than Fannie Mae pricing but the amount of documentation required is greatly streamlined so the process is fast. This loan is designed for investors who have lots of rental properties and don’t have time explaining tax returns. Also it is O.K to close in the name of a LLC.