DSCR Loans

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Long-Term Rentals/DSCR Loans

Loan Amounts:

  • Long-Term Rental Loans: $100,000 – $2,000,000
  • Rental DSCR Loans: $100,000 – $2,000,000

Interest Rates:

  • Long-Term Rental Loans: Starting at 5.95%
  • Rental DSCR Loans: Starting at 5.75%

Credit Score (FICO) Requirements:

  • Long-Term Rental Loans: Minimum 660
  • Rental DSCR Loans: Minimum 680

Debt Service Coverage Ratio (DSCR):

  • Long-Term Rental Loans: Minimum 1.05
  • Rental DSCR Loans: Minimum 1.0

Property Value:

  • “As Is” appraised value must be $100,000 or greater (geographical restrictions may apply).

Loan-to-Value (LTV):

  • Purchase: Lesser of up to 80% of the “As-Is” value or up to 80% loan-to-cost
  • Refinance: Up to 80% of the “As-Is” value
  • Cash-Out Refinance: Up to 75% of the “As-Is” value

Property Types:

  • Non-owner-occupied 1-4 family properties, condos, townhomes, and planned unit developments (PUD).

Loan Terms:

  • 30-year fixed-rate options available.
  • Hybrid ARMs (5/1, 7/1, 10/1) and interest-only options offered.

Rental-Specific Qualifications:

  • Property must be rent-ready and leased to qualify.
  • Covers single-family, 2-4 unit multifamily, condos, and townhomes.

Rates And Terms Subject To Change

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What Are Long-Term Rental Loans?

Long-term rental loans are financing solutions designed for investors purchasing or refinancing income-generating properties intended for extended leases. These loans can take various forms, with qualification criteria and structures tailored to different investment strategies and borrower needs.

DSCR Loans: A Popular Option for Long-Term Rentals

One common type of long-term rental loan is the DSCR (Debt Service Coverage Ratio) loan, which evaluates the property’s rental income potential rather than focusing solely on the borrower’s personal financial profile. These loans streamline the approval process by centering on the property’s ability to pay for itself.

Here’s a quick breakdown:

  • DSCR Explained: The Debt Service Coverage Ratio measures how well a property’s rental income can cover its debt obligations. For example, a DSCR of 1.2 means the rental income is 20% higher than the loan’s monthly payments.
  • Ideal for Investors: DSCR loans are often used by investors who prioritize cash flow or have multiple properties, as they simplify qualification compared to traditional income-based underwriting.

Other Long-Term Rental Loan Options

In addition to DSCR loans, long-term rental investors may consider these financing alternatives:

  • Full-Doc Loans: These loans rely on the borrower’s personal income and financial stability, similar to traditional residential mortgages, making them suitable for borrowers with strong personal credit and income.
  • Bank Statement Loans: Ideal for self-employed borrowers, these loans use bank statements to verify income instead of W-2s or tax returns.
  • Portfolio Loans: Designed for investors with multiple properties, these loans allow you to bundle properties under a single financing package for streamlined management and improved terms.

Each loan type has its own advantages, so the best choice depends on your unique financial situation, goals, and property type.

Why Consider a Long-Term Rental Loan?

Long-term rental properties can provide a stable and predictable income stream, especially in markets with high demand for quality housing. A long-term rental loan helps you:

  • Purchase new investment properties
  • Refinance existing rental properties to access equity or secure better terms
  • Scale your portfolio with financing solutions designed for your strategy

Tailored to Your Investment Strategy

Whether you’re looking for a loan focused on rental income (DSCR), one based on your personal financial profile, or a flexible portfolio solution, there’s a long-term rental loan designed to meet your needs. Each approach offers unique benefits, empowering you to make the most of your investment.