Exploring Primary Property Types Eligible for DSCR Loans

Debt Service Coverage Ratio (DSCR) loans have become a fundamental financing tool in real estate investment. These loans are designed to assess a property’s cash flow capabilities to ensure it can cover its debt obligations, making them ideal for investors looking at various property types. From residential rentals to commercial developments, DSCR loans offer a flexible and reliable means for investors to leverage potential income-producing properties without the stringent personal income requirements of traditional financing.

Below, we list the primary property types a DSCR loan may cover. If you’re considering investing, contact the loan experts at EB Mortgage for a lending solution right for you.

Single-Family Residential Properties:

These include standalone houses intended for rental purposes. They are a common choice for investors using DSCR loans because they often generate stable rental incomes.

Multi-Family Properties:

This category includes duplexes, triplexes, quadruplexes, and larger apartment complexes. Multi-family properties are particularly attractive for DSCR loans because they tend to generate higher total rental income compared to single-family properties, potentially offering better coverage for loan payments.

Mixed-Use Properties:

These properties combine residential and commercial spaces, such as a building with retail shops on the ground floor and apartments above. DSCR loans for mixed-use properties consider the combined income from both commercial and residential units.

Commercial Properties:

These can include office buildings, retail centers, warehouses, and industrial properties. For DSCR loans covering commercial properties, the focus is on the rental income these properties can generate from businesses.

Condominiums:

Individual units in a condominium complex can be financed with DSCR loans if they are intended for rental purposes. Like single-family homes, they are a popular choice for investors looking to enter real estate markets at a potentially lower price point.

Student Housing and Senior Living Facilities:

Specialized rental properties like those for students or senior citizens can also be financed with DSCR loans, provided they operate primarily from rental income.

Vacation and Short-Term Rental Properties:

Properties in vacation areas or those intended for short-term rentals (like those listed on Airbnb) can qualify for DSCR loans. The calculation might slightly differ due to the seasonal or fluctuating nature of income.

For more options and more solutions, contact EB Mortgage to get started!

EB Mortgage is a locally owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us or e-mail us today! 

Written by the digital marketing team at Creative Programs & Systems: www.cpsmi.com