The DSCR Cash Flow Loan Opportunity for Originators

A detailed overview of the DSCR loan product and opportunity for originators.

A Debt Service Coverage Ratio (DSCR) cash flow loan is a crucial tool every originator should offer. The reasoning is simple: real estate investors continue to add to their portfolios despite market volatility. In fact, CoreLogic reported that in 2023 25% of purchases were investor transactions. This occurred during a time of rising interest rates, high inflation and economic volatility. Savvy real estate investors know that real estate can help survive market volatility by generating passive income and providing tax benefits. These investors also know the importance of having a trusted, go-to originator to help them quickly secure deals.

Why Should Originators Offer a DSCR Cash Flow Loan?

Originators who offer a DSCR product are fully serving their real estate investor clients with the right loans to suit their needs. These loans are easy to do with qualification based on determining if an investment property generates sufficient cash flow to cover the mortgage payments. It can be a great choice for real estate investors who do not want to provide complicated documentation, employment information or personal income. Additionally, traditional loans won’t be an option for investors who own more than 10 investment properties and have reached the Agency credit limit. Deephaven does not have a limit on the total number of financed properties. 

Another excellent reason to offer a DSCR loan option is due to the large number of investors in the space. According to Census data there are over 17 million real estate investors who manage approximately 49.5 million units. A DSCR cash flow loan allows them to use their rental income from an investment property to qualify. The best reason? Real estate investors are repeat clients as they build their portfolios and refinance mortgages to purchase new properties. They just need a trusted lender who can fully serve them with the right investor loans. If you aren’t offering a DSCR cash flow loan you could be missing out on business your competitors are closing every month.  

DSCR loans are one of the most utilized loans at Deephaven Mortgage. Deephaven has been setting records in non-QM for many consecutive months and DSCR loans make up a large percentage of the volume. 

What are the benefits of a DSCR Cash Flow Loan?

Real estate is consistently a top choice for investment despite market volatility. Due to the demand in today’s market, properties typically rent immediately, generating rental income and a solid return on investment. Competition can be fierce in many markets making a quick to close loan crucial. One great benefit of a DSCR loan is that it is a low hassle quick to close loan.

Other benefits include:

  • Personal income and employment information is not required.
  • There is no limit to the number of financed properties.
  • Investors can commit to many properties simultaneously. More than one loan for different properties can be closed at once.
  • Short-term rentals are allowed.
  • Real estate investors can borrow or vest in the name of an LLC.
  • Non-warrantable condos are allowed.

What are the down payment requirements and highlights for a DSCR cash flow loan?

The flexibility in a DSCR loan can’t be beat! Here are the highlights for Deephaven Mortgage’s DSCR program:

  • Credit scores down to 660
  • LTVs up to 80%
  • Loan amounts up to $2.5 million, minimum loan amount $100,000
  • Foreign national loan amount $1.5 million
  • Interest-only options to maximize cash flow
  • Cash-out refinance solutions to unlock equity or consolidate debt
  • 1-4 units     
  • DSCR 5-9 Unit product available
  • Business purpose lending offering non-QM products that are available nationwide including certain states without licensing requirements for brokers, loan officers, and lenders

What is the best way to get started?

Contact Deephaven today and ask! Many originators learn to become DSCR experts simply by closing DSCR cash flow loans. Another great way to become educated is to schedule training for you and your team. Reach out to [email protected] or start the partner approval process here: Send us your scenarios and let’s get started.

Find out why DSCR cash flow loans are one of the most utilized mortgage products at Deephaven Mortgage for real estate investors!

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