North Carolina DSCR Loans

Are you searching for an investment property in North Carolina? Griffin Funding serves the entire state, including the following locations:

If you’re wondering whether a property you want to purchase will qualify for a DSCR loan in North Carolina, contact us today and receive more information about our service locations across the state.

A North Carolina DSCR loan allows borrowers to qualify for loans based on the amount of potential cash flow from a property rather than their personal income. DSCR loans in Charlotte and across the rest of NC are non-QM loans, or non-qualified mortgages, and they aren’t bound by the documentation requirements of the Consumer Financial Protection Bureau (CFPB).

You can use a DSCR loan in NC for your commercial or residential real estate portfolio, especially if you’re an investor who needs a loan based on non-traditional income verification. Rather than using a tax return or a W2, a lender will make calculations for the loan based on the property’s income potential.

One of the barriers real estate investors face in acquiring new property is the income stated on their tax returns. Investors often write off expenses for their properties, making them ineligible for a conventional loan. However, the application process for DSCR loans doesn’t require proof of income from pay stubs or tax returns.

Using a DSCR loan in North Carolina is one way to purchase property without having to demonstrate the significant amount of personal income that a conventional loan would likely require. Essentially, a DSCR loan in NC uses cash flow rather than income documentation to help you qualify for a commercial or residential real estate loan.

Even though DSCR loans have non-traditional methods to determine qualification, potential borrowers must still meet other standards. Borrowers with a good DSCR — which is typically around 1.25 — can qualify for beneficial loan terms and rates. However, Griffin Funding can provide financing to applicants who have a DSCR that’s less than 1.

So, how does the DSCR calculation work? It’s a number calculated by taking your gross rental income and dividing that number by the total mortgage payment (the principal plus interest, taxes and insurance). You’ll sometimes hear the mortgage payment referred to as “debt service.” For example, if your property generates $100,000 in rental income and has $80,000 in debt service, your DSCR would be 1.25.

DSCR loans are a popular loan option, especially in fast-growing markets like Charlotte and Raleigh. To qualify, you must meet specific DSCR loan requirements in NC. The DSCR loan requirements in NC include:

• Good credit score: The average credit score for borrowers that work with Griffin Funding is 732, but we can work with credit scores as low as 620.
• Minimum loan amount of $100,000: Loan amounts typically start at $100,000 and go as high as $20 million, making DSCR loans suitable for various real estate investments.
• Property appraisal: An appraisal is required to assess the property’s market value and expected rental income.
• Investment properties only: DSCR loans in North Carolina are designed exclusively for non-owner-occupied, income-generating properties.

At Griffin Funding, we offer highly competitive DSCR loan rates in North Carolina for qualified borrowers.

To qualify for a DSCR loan, you must have 20 percent of the total loan value for a down payment. Some lenders require a higher down payment amount of 25 percent, but the general range is 20 to 25 percent. You’ll also pay lender and service fees, which may range from zero percent to three percent of the total loan amount.

Whether you’re targeting long-term investments or short-term rentals like those listed on Airbnb or VRBO, DSCR loans in North Carolina provide versatile financing solutions and other valuable benefits, including:

• No income verification: With a DSCR loan, you can obtain financing without showing proof of income.
• Quick closing times: DSCR loans often have faster closing times than traditional mortgages.
• High loan limits: With a DSCR loan in NC, you can get up to $20 million in financing. Whether you want to buy a single-family home or a multi-unit property, a DSCR loan provides you with the funds to achieve your goals.
• Unlimited property potential: There is no cap on the number of properties you can finance.
• Unlimited cash-out potential: DSCR loans allow for unlimited cash-out options, giving you the flexibility to reinvest in additional properties or other ventures.
• Interest-only payment options: This option can lower your monthly payments for a set period of time and improve cash flow.

The most crucial part of qualifying for non-QM loans like DSCR loans is reaching the coverage ratio, which must be at least 0.75 when working with Griffin Funding (although exceptions do apply in some cases). Once you’ve met that threshold, the next determining factor is the loan-to-value (LTV) ratio, which is an expression of the total mortgage amount compared to the full appraised value of the property. Lenders traditionally require an LTV of 80 percent.

The lender will look at your credit score, too. Griffin Funding accepts scores as low as 620. However, you still may find it helpful to complete an application for your DSCR loan after increasing your credit score as much as possible.

Applying for a DSCR loan in North Carolina is a straightforward process, but it’s essential to follow each step carefully to ensure a successful application. Here’s a step-by-step guide to help you navigate the process:

1. Calculate your DSCR ratio: Your DSCR ratio plays a crucial role in qualifying for a DSCR loan. You can use our free DSCR calculator to estimate this figure or reach out to us and have one of our mortgage specialists calculate your DSCR for you.
2. Assess your credit score: Ensure that your credit score meets the minimum requirement of 620. Improving your score can increase your chances of securing better loan terms.
3. Gather required documentation: Prepare all necessary financial documents, including proof of rental income and property appraisal reports.
4. Complete the application: Fill out a DSCR loan application through the Griffin Funding website, providing all the required information and documentation.
5. Review loan terms: Once your application is reviewed, your lender will provide you with the DSCR loan rate in North Carolina that you qualify for, as well as the corresponding loan amount and terms.
6. Close the loan: After accepting the loan terms, proceed to close the loan. Make sure to have all necessary funds ready for the down payment and closing costs.

You’ll want to explore the other loan options available from Griffin Funding if you decide that a North Carolina DSCR loan isn’t what you need. We also offer additional non-QM loans that include the following.

If you’re intrigued by the possibilities and benefits of a DSCR loan, we encourage you to find out if you qualify for a North Carolina DSCR loan from Griffin Funding. Start by completing our online application. Additionally, consider downloading the Griffin Gold app to help manage your finances, monitor your credit score, and get on track for the best loan terms.

Have any questions? You can also contact us online or call us at (855) 394-8288. One of our experienced and helpful loan specialists will guide you through the process and provide all the details you need to make an informed decision.