DSCR HELOANs: Home Equity Loans for Investment Properties

DSCR HELOANs are specifically designed for investment properties. These investment property home equity loans qualify borrowers based on the property’s debt service coverage ratio rather than personal income. You don’t need to provide tax returns or traditional income verification. The loan allows you to leverage your property’s equity without refinancing your existing first mortgage, keeping your current rate intact while accessing additional capital.

Another option for real estate investors is a home equity line of credit (HELOC), which provides revolving credit you can draw funds from as needed rather than receiving a lump sum. Griffin Funding also offers fixed-rate HELOCs that combine the flexibility of a credit line with the stability of a fixed interest rate. 

When deciding between a HELOC vs. a home equity loan for an investment property, consider that home equity loans provide a lump sum with predictable payments, while HELOCs offer ongoing access to funds. 

If you’re considering a cash-out refinance instead of a HELOAN, use our DSCR refinance calculator to compare how much equity you can access with each option and see which better fits your investment strategy.

Griffin Funding specializes in DSCR HELOANs for investment properties. Unlike traditional banks that require W-2s and tax returns, we focus on your property’s rental income to determine qualification. Our streamlined process makes it easier for real estate investors to access equity without the strict income documentation requirements of conventional lenders. 

Getting a DSCR HELOAN is straightforward if you meet the basic requirements. You’ll need a 680+ credit score, at least 20% equity in the property (80% maximum combined LTV), a DSCR of 1.0 or higher, and documented rental income through lease agreements. The process is often simpler than traditional loans because there’s no personal income verification required. Working with Griffin Funding ensures efficient processing and approval.

Yes, if the DSCR HELOAN is secured by the rental property itself, the interest qualifies as mortgage interest and is fully deductible as a rental expense on Schedule E. The funds must be used for business purposes such as property improvements, purchasing additional rental properties, or other investment-related expenses. 

Note: Tax rules are complex and change frequently, so you should consult with a tax professional or CPA to understand how HELOAN interest applies to your specific situation and ensure proper documentation of how you use the funds.

Yes, you can obtain DSCR HELOANs on multiple investment properties. Each property must have sufficient equity (80% maximum combined LTV), generate adequate rental income (DSCR of 1.0 or higher), and you must maintain the required credit score and reserves. 

There’s no limit on the number of properties you can leverage, making DSCR HELOANs an effective tool for investors building larger portfolios who need capital without selling assets.