Based in New York City for nearly 15 years, BFR is an expert in DSCR mortgages. We will walk you through what is a DSCR mortgage and how the process works.

What Is a DSCR Loan?

A Debt Service Coverage Ratio (DSCR) loan is a type of non-qm mortgage where you qualify for a loan based on your property’s cash flow, not your income. A DSCR mortgage is ideal for real estate investors. You can qualify for a home loan without using your tax returns and you can avoid high rates and high points of private loans!

Obtaining a debt service coverage ratio loan can help you expand your investment portfolio easier and is an increasingly popular loan product OFFERED in most of the 50 states. Please call us at 212-933-0157 or email info@blocklending.com to see if we can help you in your area.

How Does a DSCR Loan Work?

Lenders will evaluate the rental income on a property and compare that to the proposed mortgage payments. They don’t review tax returns and are essentially lending on the merits of the property, more so than the borrower themselves. They do check for credit and want to make sure certain equity requirements are met.

Benefits of BFR DSCR programs:

Benefits of DSCR Loans for real estate investors include:

• Potentially faster closing times
• No income or employment verification required
• No limit on the number of properties one can obtain
• Loan amounts up to $5,000,000 or higher
• Unlimited cash-out with some BFR lenders
• As little as 20% on down payments with some of our lenders
• Interest-only loans typically available
• Suited for real estate investors

What Is the Debt Service Coverage Ratio Lenders look for?

Some lenders ask for a 1.25% DSCR to qualify for a debt service coverage ratio loan. However, Block Financial Resources, has lenders that allow real estate investors to qualify for a loan with a DSCR as low as .75%. This means if a property rents for $3,000/month, the lender will allow PITI (principal, interest, real estate taxes, and homeowners insurance) of $4,000 on a single family home.

Some BFR DSCR Highlights:

• reserves

  • 2 Months Reserves ONLY - Loans to $1,500,000
  • Use 100% Cash-Out for Reserves
  • No Additional Reserves for Other Financed Properties

• property types

  • Condotel, Modular, Non-Warrantable Condos
  • Multi-Residental: 5-8 Units
  • Mixed Use: 2-8 Units with up to THREE Commercial Units
  • Commercial Unit Occupied by Borrower's Own Business - OK
  • No Limits on number of properties financed through ACC
    (Max of $5 Million aggregate)

• credit

  • No Minimum Tradelines with 3 Credit Scores
  • Not Required to Pay-Off Charge-Offs and Collections
  • No Housing History Required on REO's NOT Reported on Credit
  • Housing History: 1x30x12 allowed OR 12x30x12 with reduced LTV
  • BK & Foreclosure: 24 Months Seasoning with reduced LTV

• assets

  • No Sourcing on Large Deposits
  • Assets Sourced for only 30 days
  • Gift Funds OK with 10% of Borrower's Own Funds
  • Short-Term Income OK up to 125% of 1007 Survey