Overview
DSCR (Debt Service Coverage Ratio) Program.
This is the easiest program among all of the Non-QM programs.
Income / Employment Status / Tax Return is not required.
Program Highlights
No Job/Income Needed
Investment Property Only
Prime DSCR
1) Max. LTV: 75%;
2) Max. Loan Amount $3,000,000;
3) Min. FICO: 700;
4) First Time Investor: Acceptable.
Expanded DSCR
Manufactured Home Allowed.
1) Loan amount >$150k-$250k & LTV>70%-75%;
2) Loan amount >$1.5m-$2.0m & LTV =<75%;
3) Max. LTV 75%;
4) Min. FICO: 660.
What is DSCR?
Do you know how to qualify a house mortgage loan without any job information and income?
Are you not qualified with the conventional mortgage loans?
Do you know which loan program is the easiest product?
Do you want to know how to use the reduced documents to qualify a loan?
Is it very difficult for you to get a home loan in your industry?
We offer a perfect loan program to satisfy the above key factors - DSCR program. It is the most popular Non-QM product in house mortgage loans.
DSCR (Debt Service Coverage Ratio) is designed for experienced real estate investors and qualifies borrowers based on cash-flows solely from the subject property to analyze the risk degree of an investment. Today, we focus on understanding the definition of DSCR and unveiling the mystery of DSCR program from the perspective of housing mortgage investment.
Guidelines
Prime DSCR
★Cash-back used for reserves is acceptable to cover one-half of the reserves required (e.g., 6 months reserves required, only 3 months may be covered by cash back to borrower.
★Must document that all mortgages are current within 15 calendar days prior to the Note date.
★Minimum 12 months of housing payments required, with maximum delinquency of 1x30. A VOM/VOR is required for all the borrower’s outstanding mortgages or rent paid.
★Continuity of obligation is required for all refinance transactions.
★When paying off a private mortgage, a copy of the note and security instrument for the loan to be paid off is required.
Expanded DSCR
★Most recent 2 months bank statement required.
★100% access letter obtained from all joint owners.
★Gift funds are acceptable for use toward down payment and loan costs.
★Stocks/Bond/Mutual Funds - 90% of stock accounts may be considered in the calculation of assets for closing costs and reserves.
★Vested Retirement Account funds – 80% may be considered for closing and/or reserves.
★When bank statements are used, large deposits must be evaluated.
★Loan amounts ≤ $1,500,000 = 1 Full Appraisal (ARR, CDA or FNMA CU Risk score of 2.5 or less is required in addition to appraisal).
★Loan amounts > $1,500,000 or "flip" transaction = Two Full Appraisals.
★Max Mtg Late 0x30x12.
★Bankruptcy/Foreclosure/Short Sales/Deed-in-Lieu ≥3 Years.
★Prepaid Payment Penalty is the 5% of the remaining loan balance.
How to calculate DSCR?
For housing mortgage loans, DSCR refers to the ratio of monthly rental income of an investment house to total housing expenses(such as principal, interest, land tax, insurance and management fee (if some expenses are not actually incurred, it will be recorded as 0)). The lower the ratio, the greater the risk of the loan. It can be expressed in the following:
We offer "No ratio DSCR" for our clients, which means the ratio can be down to "0". In our conventional loan products, we need to compare our income with the monthly PITIA(Principle/ Interest/ Tax/ Insurance/ HOA) and other liabilities of the mortgaged house to decide if the loan can qualify.
Benefits of DSCR
No ratio DSCR, a loan product that does not verify the income, has no requirements for the income of borrower because it does not involve the calculation of DTI. And the minimum DSCR ratio can be as low as 0. Even if the rental income is low, we can still do it! This is a good choice for borrowers with low income or more liabilities.
Besides, Foreign Nationals are acceptable for this program as well, especially with F1 visa. If you’re a foreigner, and can not qualify with a conventional mortgage loan, contact us and obtain your loan scenario.
