Valor DSCR Loan Options
Valor Lending Group has all DSCR loan options
Up to 85% LTV on a DSCR purchase and up to 80% LTV on cash out DSCR loan options.
The DSCR long term rental loan is based on the property cash flow (rents) location, LTV and credit score.
The current or market rents must cover the new total monthly payment (PITIA) in full to meet the minimum 1.00 DSCR requirement, and that dictates what LTV is available for a specific property.
The market rents are determined on a 1007 rent schedule that is completed with the appraisal.
We have a knowledgeable and experienced team behind you that knows all the tricks of the trade.
Valor Lending Group has multiple funding sources for these types of rental property loans.
We also have the very best communication, rates, and turn times.
The DSCR Loan is Available in Most States Nationwide
What is a DSCR Investment Property Loans?
No Tax Returns, No W2’s and No DTI Calculated.
The DSCR long term rental loan is based on the property cash flow (rents) location, LTV and credit score.
The current or market rents must cover the new total monthly payment (PITIA) in full to meet the minimum 1.00 DSCR requirement, and that dictates what LTV is available for a specific property.
The market rents are determined on a 1007 rent schedule that is completed with the appraisal.
What is Debt Service Coverage Ratio (DSCR)?
The DSCR = Monthly Current or Market Rents / New Total Monthly Payment PITIA (principal, interest, taxes and insurance and any HOA).
If the property current or market rents are enough to cover the new total monthly payment (PITIA) The property DSCR would be 1.00 and meet the requirement.
Example of DSCR Calculation: New P&I Payment = $1,851.26 + 758.53 taxes + $147 insurance + No HOA = $2,756.79 Total Monthly Payment (PITIA)
Rent/Total Monthly Payment = $3,200 Current or Market Rents/$2,756.79 = 1.16 DSCR (pass)
Debt service coverage ratio (DSCR) is especially important because the result gives indication to the lender of whether the rents are able to pay the monthly payment.
A DSCR over 1 is good, and a DSCR at 1.25% or higher provides best pricing.
The minimum DSCR a lender will demand depends on macroeconomic conditions. If the economy is growing, lenders may be more forgiving of lower qualifying ratios.
Here’s how to interpret your DSCR:
- DSCR < 1: You have negative cash flow. You don’t have enough rental income to service the debt (New PITI payment).
- DSCR = 1: You have exactly enough rental coming in to service the debt (New PITI payment).
- DSCR > 1: You have positive cash flow to service the debt (New PITI payment).
DSCR Investment Property Loan Highlights:
- No Tax Returns
- No W2’s
- No Debt to Income Ratio (DTI) Calculated
- Employment NOT Required
- Income NOT Required
- Based on Subject Property Cash Flow/Rents
- If property is vacant upon purchase market rents from the appraisal will be used to calculate DSCR
- SFR, Condo and 1-4 Unit
- Maximum Loan $6.5M
- Unlimited Financed Properties OK
Have additional questions?
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Recap of our Loan Products
- Hard Money Loans (20% down / minimal documentation) Typically Fund in 7-10 days.
- Stated Income Loans (Great for business owners and self employed ) No tax returns!
- 100% financing is available (we can cross collateralize other properties if there is enough equity)
- Valor VA Home Loan 100% financing up to $1.5MM
- Rental Property Loan – No tax returns or DTI calculation! Based on subject property cash flow – No DSCR Coverage needed!
- Flipper & Rehab Loans (Flip a property with one of our many options)
- 2nd Position Loans up to $5mm
- Raw Land & Lot Loans
- Ground up Construction for spec homes, custom homes and commercial ground up.
- Farms, Vineyards, Ranches and Agricultural Properties (25-30% down)
- 10% down Jumbo’s up to $1.5mm
- Manufactured Housing / Mobile Homes (20% down / 600+ credit score)
- Acreage Properties
- Commercial Loans up to $500mm
- 3% & 5% down Conventional Loans– LPMI (Lender paid mortgage insurance)
- Foreign Nationals Loans (no social security or residency required)
We Also Offer:
- Conventional Conforming Loans
- High Balance Conforming
- Jumbo Loan Financing | 10% down Jumbo to $1.5mm
- FHA, USDA
- Reverse mortgages up to $1 Million Value
- Cash Out Refinancing
**Rates and terms subject to change without notice
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