You’ve likely heard the rumblings. The real estate market is shifting, and there are new opportunities in the investor space. And it’s all true – if you want to be successful and continue to grow your mortgage business in 2023, it’s crucial to expand your loan offerings to include solutions for this growing segment of the industry.
Fortunately, at Stronghill Capital, we make it easy for you. With our innovative Debt Service Coverage Ratio (DSCR) loan program, you can offer your investor clients fast, flexible, and foolproof solutions that will get their investment property loans over the finish line – even if they have been rejected from traditional lenders in the past. In fact, our team has recently revamped the program to fit even more types of real estate investors.
Now’s the time to incorporate DSCR loans to expand your business and boost your bottom line this year. But first, let’s go through the basics…
What is a DSCR loan?
DSCR is a type of Non-QM loan that is designed to help real estate investors secure flexible financing without providing income or tax documentation. With a DSCR loan, they can simply use their property’s cash flow to prove their ability to repay the loan.
Here’s how our DSCR program works: We calculate the DSCR, or the borrower’s ability to make their loan payments, by dividing the property’s net operating income (NOI) by its total debt service (loan payments). If the property has a higher net operating income compared to its debt service, that means there’s a lower risk of default, and the investor can easily qualify for financing.
What are the benefits?
Incorporating DSCR loans into your product offering is beneficial to both you and your clients. Not only does it give investors flexibility, but it also helps you reach a more diverse set of borrowers and close deals faster. Here’s how Stronghill can help:
- Faster Closings: Since we don’t require tax returns or other income docs, you and your investor clients can enjoy a more streamlined transaction process.
- ExpandedProperty Types: Investors can use our DSCR loan program to close on 5-8 Unit Multifamily and 2-8 Unit Mixed-Use properties.
- Improved Terms: While other lenders generally require a DSCR ratio above 1.0x, we’ve reduced ours to 0.75x! That means your clients have a higher chance of qualifying when you partner with us.
Here’s a closer look at our updated guidelines:
- Minimum DSCR: 0.75x
- LTVs up to 80%
- 660+ FICO Credit Score
- Purchase, Rate/Term, and Cash-Out Refinance Options
- No Borrower Income or Employment Information Required
- Close in Business Entity or Individual
- Entity Closing = No Credit Reporting
- Non-NMLS Originators Okay
Why close with Stronghill?
Lenders across the country are offering DSCR solutions, but not everyone can offer investors the flexibility that we can. In addition to reducing our DSCR ratio to 0.75x, we also allow borrowers to close their loans in the name of their business entities. This means no credit bureaus will report on the guarantor’s personal credit reports, so the loan will not affect your client’s credit history.
When you partner with Stronghill, you can also take advantage of our omnichannel delivery options (more on that here) as well as our diverse product sets. Besides closing DSCR, we also offer small-balance commercial and Non-QM programs that are made to give you more ways to serve your clients.
As the market shifts, you want to have a strong lending partner by your side who is capable of adapting to new industry trends. It’s a fact that the investor community is growing this year, so now is the time to incorporate stronger loan solutions into your product set. The first step is connecting with us and experiencing the Stronghill Advantage for yourself!
