What is a DSCR loan? Its stands for Debt Service Coverage Ratio. DSCR is calculated by dividing net operating income (NOI) by total debt service (the total amount of principal and interest payments due). Essentially, it indicates that the borrower generates enough rental income to cover the mortgage/insurance/property taxes of the property.
Spartan Commercial Mortgage offers DSCR Loans for Real Estate Investors! These loans are considered the “Old Stated Income” loans offered years previously. But, there are some differences. The main difference is that a DSCR loan focuses on the the potential income of the property rather than the “stated” income of the proposed borrower. Another notable difference is that DSCR tends to close faster than a stated income loan because the focus is on the property. Whereas in a stated income loan, both the property and the borrower are equally underwritten.
All Allowed Property Types:
- Apartment Buildings and Multi-Family Properties
- Mixed-Use
- Retail and Office
- Auto Repair (No Gas Stations)
- Day Care
- Beauty Shops
- Motels/Hotels
- Warehouse
- Mobile Home Parks
- Campgrounds
- Self-Storage
- Dry Cleaner (Drop off only)
- Recreational properties
Ineligible Properties:
- Raw land
- Likewise, land requiring “ground up” construction (any loan requiring rehab work must equal 10% or less of the property value)
- Also, Gas stations (although, we will lend on auto repair/auto body shops) are not allowed.
LTV: Maximum LTV (Loan to Value) is 80% for a purchase and for a cash out refinance, the max LTV is 75%.
Credit Scores for Connecticut Stated Income Mortgage Loans:
- 725 Min Score for our Elite Program
- 660 Min Score for our Traditional Program.
- 659 and Under for our Alternative Financing.
Closings: Three to four weeks (the timeline is based on how quickly we receive all the required information).
Rates: We offer 30 year fixed rates, 25 year fixed rates, 20 year fixed rates, 15 year fixed rates, and 5 or 7 year adjustable rate mortgages. Rates will vary depending on credit score.
Points: Points do not need to be charged unless the borrower wants to buy down the rate.
Prepay: Declining 5%-4%-3%-2%-1% Prepay Penalty. Call us for alternative terms.
States: We transact commercial mortgages in 42 states. Except for Alaska, Alabama, Hawaii, Michigan, Nevada, North Dakota, Vermont and West Virginia.
What is a DSCR Loan? Essentially, it is your pathway to purchase more real estate!
Call us today for a free consultation or click here to get pre-approved.
Thanks,
Michael Meyer
President Spartan Commercial Mortgage Services
mike@spartancommercialmortgage.com
(860) 876-0572