DSCR Loan Basics
- DSCR loans can be used for complete / vacant homebuilder or condo developer inventory
- DSCR loans do not have debt to income ratio (DTI) requirement and they do not appear on your credit report
- The vacation rental loan, also known as the short term rental loan, str loan, is a type of 1-4 unit dscr loan. This program is for non-owner occupied vacation rental property (e.g. Shore Points or Poconos) that will be rented short term on Airbnb ® or VRBO ® type platform, or with a real estate agent.
- There is no hard limit on how many properties can be financed using this program
- Portfolio loans available
Key Parameters
Long Term Rental
- 75-80 LTV purchase and rate/term refi
- 70-75 LTV cash out refi
- 1.00 DSCR (Rent > PITI payment)
- 0.75-0.99 DSCR available with some lenders at higher interest rates
- No seasoning required up to 100 LTC
- 3 months seasoning with no LTC cost cap
- 720+ FICO for best rates
- 660-719 FICO ok rates
- 580-659 FICO high rates, and only if no mortgage lates on credit report
- Property rented or rent ready, C4 condition or better
- No income or employment verification. No DTI requirement or tax returns.
Short Term Rental
Same as long term rental DSCR loan except:
- Marginally higher interest rate
- Instead of using market rent for long term rental, they use Airdna ® or similar data and use short term rent less vacancy factor
- For properties listed or to be listed for short term rental with a real estate agent, or on Airbnb ®, VRBO ®, and similar platforms
Nonbank Clearing Advantages
- Cover almost any lendable scenario (multiple outlets)
- Good service and simplified loan processing
- Competitive rates, structures, and seasoning
