Debt Service Coverage Ratio: 6MO SOFR ARM No-Income Mortgage Loan
Finance rental properties without tax returns or income verification. A SOFR ARM DSCR loan qualifies you based on your property’s rental income with an adjustable rate that starts lower than fixed-rate mortgages.
- Investor-friendly financing
- Competitive adjustable rates
- Unlimited cash out
- No limit on the number of properties
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Benefits
SOFR ARM Investment Loan: Top Benefits
Competitive rates:
Lower starting rate and payment compared to fixed-rate DSCR mortgages give you more buying power.
No W-2 or employment verification:
Qualify without providing tax returns, W-2s, or employment verification.
Potential to lower interest rate:
The interest rate can decrease if market conditions improve, unlike fixed-rate options.
Buy multiple properties:
No limit on the number of rental properties you can finance with one loan.
High loan amounts:
Loan amounts up to $2 million available for qualified investors.
Unlimited cash out:
Unlimited cash-out refinancing up to 75% loan-to-value ratio.
How it Works
What Is a 6-Month SOFR ARM DSCR Loan?
A 6-month SOFR ARM is an adjustable-rate investment property loan for real estate investors that uses the Secured Overnight Financing Rate (SOFR) as its index. Combined with a DSCR loan structure, this financing option lets you qualify based on the property’s rental income.
- The interest rate on a SOFR ARM DSCR loan adjusts every six months based on the 30-day SOFR average plus a margin (typically 3.5%).
- Unlike fixed-rate DSCR loans, your rate and payment can decrease if market conditions improve.
- Safety caps protect you from dramatic increases.
- The initial adjustment cap is 2% over the start rate, subsequent caps are 1%, and the life cap is 5% over the start rate.
Key DSCR loan features:
- No income or employment verification
- Cash-flow based approval (DSCR)
- Investment properties only
- Adjustable-rate loan
- Safety caps prevent dramatic rate increases
Requirements
SOFR ARM DSCR Loan Requirements
Down payment:
Minimum 20% down payment required for purchase loans.
Credit score:
680+ credit score for fully-amortized loans; 740+ for interest-only options.
DSCR:
DSCR of 1.0 or higher is preferred; negative DSCR considered in certain cases.
Long-term rental:
Property must be a long-term rental — short-term rentals are not eligible under this program.
Cash reserves:
Cash reserves of 3 months required for cash-out refinances; 18 months for purchases (24 months for interest-only).
Max LTV:
Maximum loan-to-value of 75% for both purchase and refinance transactions.
Today’s SOFR ARM DSCR Loan Rates
Review today’s DSCR loan rates to help plan your next investment purchase or refinance.
Calculators
DSCR Loan Calculators
Use these tools to estimate your DSCR for a new purchase or refinance.
Areas We Serve
Build your real estate portfolio with flexible financing that requires no income verification. Our 6-month DSCR SOFR ARM loans are an excellent mortgage option for new and seasoned investors to help you build your real estate portfolio. Get started today!
FAQ
Frequently Asked Questions
Yes. Griffin Funding’s SOFR ARM DSCR loans require a minimum 20% down payment. The exact down payment amount can vary based on factors like the property type you’re purchasing, its associated risk level, your credit score, and your DSCR ratio. Higher-risk properties or lower credit scores may require larger down payments to offset the lender’s risk.
While DSCR ARM loans offer flexibility for real estate investors, there are some tradeoffs to consider:
- Your interest rate and monthly payment adjust every six months based on the 30-day SOFR average, creating payment uncertainty. While rate caps limit increases (2% initial, 1% subsequent, 5% lifetime), your costs can still rise if market rates increase.
- Interest rates are typically higher than conventional mortgages because lenders assume more risk with non-traditional income verification and investment properties.
- Larger down payments are required (minimum 20%) compared to some conventional loan options, which means more upfront capital is needed.
- Substantial cash reserves are mandatory, especially for interest-only options (18-24 months of reserves required), which ties up liquidity.
- Only long-term rental properties qualify under this program — short-term rentals like Airbnbs and VRBOs are not eligible.
No, DSCR ARM loans are straightforward if you meet the basic requirements. You’ll need a 680+ credit score, 20% down payment, adequate cash reserves, and a property that generates sufficient rental income. The process is simpler than conventional financing because there’s no income verification. Use our DSCR loan calculator to estimate your property’s ratio before applying.
If a 6-month SOFR ARM DSCR mortgage doesn’t align with your investment goals, Griffin Funding offers other non-QM 6-month SOFR loan options:
- Asset-based 6-MO SOFR ARM loans: Qualify using liquid assets instead of income, with no tax returns or proof of income required.
- Bank statement 6-MO SOFR ARM loans: Verify income through 12-24 months of bank statements rather than tax returns, ideal for investors with significant tax write-offs.
- Interest-only 6-MO SOFR ARM loans: Pay only interest for an initial period to reduce monthly payments and maximize cash flow.
- Private money loans: Access quick short-term financing through hard money loans for bridge loans, construction projects, or time-sensitive purchases.
Already own rental properties? Use our DSCR refinance calculator to explore cash-out refinancing or rate-and-term refinancing with 6-month SOFR ARM terms.
DSCR SOFR ARM loan interest rates are slightly higher than conventional mortgages because they present more risk for lenders. The rate is calculated by adding the 30-day SOFR average to a margin (typically 3.5%). Rates vary significantly based on several factors:
- Your DSCR ratio: Borrowers with a DSCR of 1.25 or higher qualify for the best rates. If your DSCR falls below 0.75, expect higher rates, larger down payment requirements, and substantial reserve requirements. Maximizing your DSCR before applying helps secure better terms.
- Credit score: While the minimum is 680 for fully-amortized loans (740 for interest-only options), higher scores result in more favorable pricing.
- Market conditions: The current SOFR index, real estate market trends, and broader economic conditions directly impact available rates.
- Lender pricing: Different lenders structure their rates differently, so comparing options is important.
Contact Griffin Funding for current DSCR ARM rates based on your specific property and financial profile.