Florida DSCR Mortgages

Debt Service Coverage Ratio [ DSCR ]

The Debt Service Coverage Ratio is a ratio of a property’s annual net operating income and its annual mortgage debt, including principal and interest. Lenders use DSCR to analyze how much of a loan can be supported by the income coming from the property as well as to determine how much income coverage there will be at a specific loan amount.

What Are the Requirements?

Minimum credit score 660
Must be an Investment Property
Minimum down payment of 20% for Single Family Homes and Warrantable Condos
Minimum down payment of 25% for Non-Warrantable Condos
Minimum down payment of 30% for Condotels & 5 to 8 unit properties
Maximum of 75% loan to value for refinances
Must have 6 months of monthly payment reserves

What is the appeal of a DSCR loan?

One of the big benefits of a DSCR loan is that a personal income Is not required. We are interested in the cash flow the subject property is calculated to generate.

Fidelity Home Group Florida DSCR Loan features:

No leases are required to be listed
No lease required if not rented
Available for purchases and cash-out or rate-term refinance
No limit on total number of properties
Maximum loan amount $5 million
No personal income used to qualify
Qualifications based on property cash flow
Condotels and Non-Warrantable Condos are eligible
40 year fixed interest only available
Properties can be in LLC’s name
Minimum Debt Service Coverage Ratio of .75%

What Is a Debt Service Coverage Ratio Loan?

A DSCR loan is a type of non-QM loan for real estate investors. Lenders use a DSCR to help qualify real estate investors for a loan because it can easily determine the borrower’s ability to repay without verifying income.

How Does a DSCR Loan Work?

Because real estate investors write off expenses on their properties, some may not qualify for a conventional loan. The debt service coverage ratio loan allows these individuals to qualify more easily because they don’t require proof of income via tax returns or pay stubs that investors either don’t have or that don’t represent their true income due to write-offs and business deductions.