What Are Florida DSCR Loans?

If you’re considering investing in real estate, you might consider a loan that focuses on the income generating potential of the property rather than your personal income. Florida debt service coverage ratio loans (DSCR loans) are an alternative to traditional Florida home loans designed specifically for real estate investors. Comparing DSCR Loans vs. conventional loans, DSCR loans may be considered more flexible. Instead of qualifying based on proof of income, job history, and tax returns, you can qualify for a loan based on your debt service coverage ratio. This ratio shows the amount of rental income you have versus the annual debt you incur by purchasing a rental property.

DSCR loan Florida requirements vary by lender because they’re not for regular home buyers. These loans are designed for real estate investors who want to invest in rental properties — both short-term rentals like Airbnbs and long-term rentals like apartment complexes — and cannot be used to purchase owner-occupied properties. If you want to invest in rental properties to supplement your income, DSCR loans in Florida are one option to consider. 

See what investment properties you can qualify for and afford by using our DSCR loan calculator to calculate your DSCR.

How Do DSCR Loans in Florida Work?

How Do DSCR Loans in Florida Work?

While there are various DSCR loan requirements in Florida, the main factor is the borrower’s DSCR. DSCR loans are one of many types of non-QM loans, which offer several advantages to real estate investors who are looking for funding. Non-QM loans are designed for homebuyers who can’t qualify for a traditional mortgage and can also offer faster closing times. Plus, non-QM loans may have financial incentives such as lower monthly payments, which provides an opportunity for investors who couldn’t typically afford a mortgage. It’s always a good idea to know the pros and cons of DSCR loans before choosing the best loan option for yourself.

In addition to Florida DSCR loans, Griffin Funding offers a number of other non-QM loans, such as asset-based loans and bank statement loans. Compare your loan options by downloading the Griffin Gold app today. 

How Do You Apply for a Florida DSCR Loan?

To apply for DSCR loans in FL with Griffin Funding, you’ll need to follow our simple 10-step process. This process starts with a simple virtual meeting or phone call, after which we’ll move on to the loan application process. Next, you’ll lock in your rate and we’ll send you the application and disclosures for you to sign. After you’ve signed those, we’ll request a list of supporting documentation, then we’ll start the actual loan process. This includes an appraisal of the property you’re applying for a loan for.

If that goes well, we’ll approve your loan and move on to the final loan document signing process. Once you’ve signed the final loan documents your loan is funded.

If you’re interested in applying for a DSCR loan in Florida through Griffin Funding, fill out our online application to get started today.

Areas We Serve

Griffin Funding provides DSCR loans to borrowers throughout Florida, including the following areas:

  • Jacksonville
  • Miami
  • Tampa
  • Orlando
  • St. Petersburg
  • Tallahassee
  • Fort Lauderdale
  • Daytona Beach
  • Sarasota
  • Vero Beach
  • Cape Coral

What Is a Good DSCR?

For the most part, lenders will require a DSCR of 1.25 to qualify for DSCR loans in Florida. The higher your DSCR is, the more rental income you have to make your required monthly payments. A good DSCR can get you access to lower down payments, lower interest rates, and other more favorable terms.

Fortunately, Griffin Funding allows you to secure debt service coverage ratio loans in FL with a DSCR as low as 0.75, and, in some cases, less than .75.

Florida DSCR Loan Benefits

As a real estate investor, there are several benefits you can enjoy when you choose a DSCR loan instead of a traditional mortgage. These are some of the most notable benefits of DSCR loans:

  • No income or employment history required
  • No limit on the number of properties
  • Loans up to $5,000,000
  • Unlimited cashout
  • Down payments as low as 20%
  • Interest-only loans available
  • Good for both new and experienced investors
  • Works with short-term and long-term rental properties
  • No reserves on cashout loans and 6 months reserves are required on loans with a DSCR of at least 1

Speak with one of our loan specialists today to learn more about our real estate investor loans in Florida.

What Are the Requirements for a DSCR Loan in Florida?

What Are the Requirements for a DSCR Loan in Florida?

For a traditional Florida mortgage loan, you’d have to submit your pay stubs, bank statements, credit history, proof of employment, among other information, to be accepted. With Florida DSCR loans, all you have to do is figure out your DSCR for a rental property and apply for a loan based on that. A DSCR of at least 1 means you’re generating enough rental income to pay for the annual debt related to that rental property, making it easier to get a loan and make monthly payments. When you apply for a DSCR loan with Griffin Funding, you’ll also be required to make a down payment, which can be as low as 20% in some cases. A minimum credit score is required. Keep in mind that the lower your DSCR, the better your DSCR loan Florida rates will be. A lower interest rate translates to lower costs over the life of the loan.

What Is the Lowest DSCR Allowed?

Most lenders require a DSCR of 1.25 to secure a DSCR loan, but Griffin Funding provides investment opportunities to a wider range of investors. If you have a DSCR of at least 0.75, you may be able to secure DSCR loans in Florida with Griffin Funding. Keep in mind that there are other requirements you need to meet to secure a DSCR loan, as outlined above.

Do You Need Proof of Income for a DSCR Loan?

One of the biggest benefits of applying for a DSCR loan is that you don’t need to provide proof of income. Rather than relying on your income to ensure you can make loan payments, Griffin Funding looks at your rental income versus your debt obligation. As long as your DSCR is high enough, you typically don’t have to worry about providing proof of income for a DSCR loan.

If you aren’t a property investor but also struggle to qualify for conventional loans, Griffin Funding also offers other types of non-QM loans, such as recent credit event loans, bank statement loans, and more.

Begin the application online or request a free quote today!

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Apply for a Florida DSCR Loan

The best way to continue investing in Florida property is to apply for a loan today. Griffin Funding offers DSCR loans in Florida that can help you get the funding you need to invest in a rental property and develop your portfolio further. To find out more about DSCR loans or apply for a Florida DSCR loan with Griffin Funding, call us today or fill out an application online.

Frequently Asked Questions: Florida DSCR Loans

Do you have to be a real estate investor to get a DSCR loan in Florida?

DSCR loans in Florida are for investors only, meaning they’re not available for home buyers who plan to use the property as their primary residence. New and experienced investors looking to purchase or refinance residential or commercial properties, such as single-family residences or multifamily apartment buildings, often use DSCR loans. The property’s income potential is crucial in determining loan eligibility and terms. 

Individuals or entities seeking DSCR loans in Florida may also include business owners or entrepreneurs looking to finance residential or commercial rental properties for their operations. 

Can DSCR loans help you build a real estate portfolio?

Yes, DSCR loans can help you build a real estate portfolio. Here’s how these loans can help: 

  • Property acquisition: DSCR loans in Florida allow investors to leverage the income potential of a property to secure financing. This enables investors to acquire commercial properties without having to rely solely on their personal finances, potentially allowing for the acquisition of multiple properties. 
  • Portfolio diversification: With DSCR loans, investors can diversify their real estate portfolio by acquiring properties in different sectors or locations. Whether it’s a single family home or a multi-unit property, the flexibility of DSCR loans can support a diversified and resilient portfolio. 
  • Scaling investments: As investors successfully manage general income from properties financed through DSCR loans, they can use the positive cash flow to reinvest in additional properties. This scaling effect allows for the gradual expansion of the real estate portfolio. 
  • Optimizing returns: DSCR loans are structured to ensure that the income generated by the property is sufficient enough to cover its debt service. This can lead to a stable and predictable cash flow, optimizing returns for investors and providing a foundation for ongoing real estate investment. 

Can I live in a home that I bought with a DSCR loan? 

DSCR loans are primarily designed for residential and commercial rental properties, and the properties financed through these loans must generate income so that the loan can be repaid. Living in a home purchased with a DSCR loan may not align with the intended use of the loan or the typical structure of the financing. 

If you’re looking to finance a property for personal use, it’s more common to explore residential mortgage options rather than DSCR loans. Residential mortgages, such as conventional mortgages, FHA loans, VA loans, and some non-QM loans, are specifically designed for individuals or families who need financing for their primary residences.