The housing market has been slowing since 2022, but the shortage of housing hasn’t gone anywhere.
Despite the general consensus that the housing economy is in recession, inventories are tight, and the supply-and-demand equation continues to favor landlords.
In one illustration of just how constrained housing supplies are, the National Association of Realtors reports that 74% of homes sold in May 2023 were on the market for less than a month. That means many renters are struggling to buy—this provides a promising opportunity for real estate investors to take advantage of rental income. If you have clients who plan to buy or refinance multifamily properties with eight units or less, LendSure’s debt-service coverage ratio (DSCR) program will help you serve these borrowers.
What is a DSCR loan?
DSCR is a way of underwriting a mortgage based on the property’s rental income. If the minimum DSCR ratio on a given deal is 1.1x, then a property that generates $4,400 in monthly rent would qualify for up to $4,000 in monthly principal, interest, property taxes, and insurance costs.
The rationale behind DSCR loans is straightforward: While a property investor might not show enough income to qualify for conventional financing, the rental property generates more than enough income to comfortably support a mortgage payment. Watch this video to learn how to calculate DSCR.
Most lenders require the borrower’s DSCR ratio to be above 1.25x. Our program requires a DSCR ratio of just 1.1x.
Features of LendSure’s DSCR program:
- Loan amounts up to $1,500,000
- Cash-out up to $500,000
- Available for 1-8 Unit properties
- Close multiple loans for the same investor at the same time
- No limit on the number of properties owned and can finance up to 10 properties for one investor
- Industry-leading funding times
- Qualify on interest-only payments—Excellent for qualification and cash-flow purposes, particularly with our 10-Year IO period on our 40-Year Term program
- FICO as low as 660
- Rate buy-down feature available
LendSure’s DSCR program is one more way for you to get loans closed and keep your pipeline full. Your LendSure Account Executive can walk you through the loan program and will be available to assist throughout the process.
The LendSure Way
It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers and ratios, and data to consider, but we know that behind every file, there’s an individual with a unique circumstance seeking a loan. We work hard to offer our common-sense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio, or refinancing of a currently-owned property.
Are you ready to grow your business? Conventional loan approval guidelines can be restrictive, but we want to offer our mortgage broker partners the education, tools, support, and guidance they need in order to say “yes” to more of their clients. This ensures happy borrowers and opportunities for bottom-line growth. What are you waiting for? Let’s get started!
Are you ready to benefit from a commonsense approach to lending? Contact us today to learn more about non-QM loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.
