Debt Service Coverage Ratio (DSCR) continues to be popular with real estate investors. Below are guidelines using Long- and Short-Term Rental Income.
We can use higher of current market rent or lease stating rental income, depending on the scenario. No limit to the number of financed properties and no reserve requirement increase.
DSCR – Short-Term Rental OK
Eligible Transactions: Purchase, Refinance Rate/ Term and Cash Out Refinance
Eligible Borrowers: Natural Person, Business Entity, and Foreign National
Eligible Property Types: Single Family Residence, 2 Unit, 3 Unit, and 4 Units, warrantable Condos and Non-Warrantable condos
Eligible Occupancy: Non-Owner-Occupied Only
Jumbo Loan Amounts: $4,500,000
* 85% LTV to $1,500,000 – 620 Credit Score
* 85% LTV to $2,000,000 – 640 Credit Score
* 85% LTV to $2,500,000 – 660 Credit Score
* 85% LTV to $3,000,000 – 680 Credit Score
* 85% LTV to $3,500,000 – 700 Credit Score
* 85% LTV to $4,000,000 – 720 Credit Score
* 85% LTV to $4,500,000 – 740 Credit Score
Use short-term market rent – Appraisal Form 1007 or Current lease dollar amount for long-term rental
Debt-Service-Coverage Ratio: .75 – 1.5. Expense Factor 15% on rental income. 85% of short-term or Long-Term rental income. Use Interest-Only Payment to qualify
We allow Title in a Trust, Corporation, or LLC, and don’t report entity Title on the borrower’s credit report
Minimum Credit Score – 600
We use the highest credit score out of three.
12-month Short-Term rental payment history and AirBnB internet listing, etc. <12-month history considered case-by-case.
Prepayment Penalty: 1 year minimum
Term: 40-Year Fixed, 40-Year Fixed Interest-Only, 30-Year Fixed, 30-Year Fixed Interest-Only, 10, 7, and 3-Year ARMs
Available in the Following States:
Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.