Single-family (1-4 unit) residential rentals, Vacation or short-term rentals, Commercial or multifamily property , rural.
Low documentation; no personal DTI, no tax returns. Borrow through an LLC or corporation
Common use cases for DSCR loans: Cash-Out Refinance, Rate & Term Refinance, Purchase, Vacation Short-Term Rental.
DSCR loans work by calculating the Debt Service Coverage ratio, which identifies whether a property can cover its own debts. The rental income is divided by PITIA (Principal, Interest, Taxes, Insurance, Association dues) to develop a ratio.
Lucas owns a rental property in Charlotte, NC, originally purchased for $300,000. Over time, the property has appreciated to $400,000, and Lucas wants to tap into his equity to fund a new investment. He secures a DSCR loan from BCC Finance Group with a 75% loan-to-value (LTV), allowing him to refinance into a $300,000 loan while meeting the lender’s 1.25x DSCR requirement. After paying off the existing balance, he walks away with cash-out proceeds to reinvest. With a 7.25% interest rate and a 30-year fixed term, Lucas maintains strong cash flow while expanding his rental portfolio.
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