Question 1

What is a DSCR Loan?

Accepted Answer

DSCR (Debt Service Coverage Ratio) loans are financing products specifically designed for real estate investors purchasing rental properties, refinancing, or taking cash out of rental properties. These loans qualify borrowers based on the property's rental income rather than personal income verification, making them ideal for self-employed investors, portfolio builders, and anyone whose tax returns don't reflect their true investment capacity.

Question 2

How do DSCR loans differ from traditional mortgages?

Accepted Answer

Traditional mortgages require W-2s, tax returns, and extensive personal income verification. DSCR loans focus on the property's ability to generate rental income that covers its mortgage payment. If the property's rental income supports the debt service, you could qualify regardless of your employment status or personal income documentation.

Question 3

Can I get a DSCR loan if I'm self-employed?

Accepted Answer

Yes. DSCR loans are particularly beneficial for self-employed investors because they don't require complex income verification or tax return analysis. The qualification focuses on the property's rental income potential, not your business structure.

Question 4

How quickly can I close on a DSCR loan?

Accepted Answer

Truehold Financial can fund DSCR loans in as few as 10 days for straightforward transactions. This speed advantage allows investors to compete effectively with cash buyers and move quickly on time-sensitive opportunities.

Question 5

Can I use DSCR loans to finance multiple properties?

Accepted Answer

Yes. One of the key advantages of DSCR loans is that each property is evaluated independently based on its own rental income potential. There's no limit on the number of investment properties you can finance, unlike traditional lending which caps borrowers based on personal income.

Question 6

What types of properties qualify for DSCR financing?

Accepted Answer

DSCR loans are available for single-family rental properties, 2-4 unit investment properties, condominiums, and townhomes. The property must be non-owner occupied and intended for rental income generation.

Question 7

How can I apply for a Truehold Financial investor loan?

Accepted Answer

Getting started is straightforward. Contact Truehold Financial to discuss your investment goals and property details. Our team will help you understand which product best fits your situation. We'll walk you through the application process, explain what documentation we need, and provide a timeline for approval and funding.

DSCR Loans