DSCR Loans

DSCR loans in California are a great option for financing 1-4 unit residential investment property. Rather than relying on personal income documentation, they qualify based on the debt service coverage ratio of the property.

The debt service coverage ratio is calculated based on the rent or market rent (typically whichever is less) as compared to the total debt service on the property. The total debt service on the property is the mortgage payment plus monthly taxes, insurance and HOA when applicable. With these loans, the property qualifies the loan.

There are many different variations of these loans. Most are based on the DSCR ratio. With a DSCR of 1.25 or more, you can typically qualify for better terms than with a lower DSCR. A 1.25 DSCR means that the property generates $1.25 for every $1.00 of total debt service as described above.

We have options for a wide range of ratios. We even can help with zero ratio options. Additionally, we can also help with vacant units, using market rents to generate the DSCR. Rates are typically much better than hard money rates – closer to traditional bank rates than the double digit hard money rates. Additionally, these are typically 30 year fixed loans.

For investors purchasing investment property, refinancing existing higher rate loans, or those looking for cash out refinances on their residential investment property in California, we can help. Closing turn times are relatively quick, and the process is streamlined as personal income documentation is not required.

Give us a call today to discuss your options at 877 462 3422!