DSCR Loans in Pennsylvania

At Griffin Funding,we can provide DSCR loans throughout all of Pennsylvania. Whether you’re looking for a DSCR loan in Pittsburgh, Pennsylvania, or somewhere else, we’re here to help. Some of the areas we serve include:

These are just a few of the cities in which we can provide DSCR loans. Reach out to learn more about how you can secure a DSCR loan in Pittsburgh or any other city within the state.

DSCR loans in Pennsylvania are designed specifically for real estate investors who want to purchase income-producing properties. A DSCR mortgage is a type of non-QM loan where borrowers can qualify for financing based on their debt service coverage ratio (DSCR), which measures a rental property’s cash flow compared to its debt obligations. Ultimately, this allows real estate investors to secure a loan based on projected cash flow.

If you apply for a traditional mortgage, there is typically a drawn-out process that you have to go through to verify your income. More specifically, conventional loans require borrowers to provide proof of income in the form of tax returns and have stringent qualification requirements.

With a DSCR loan, you can qualify for financing based on the DSCR of a rental property rather than your personal income. This opens up opportunities for real estate investors who may not qualify for conventional loans or don’t want to deal with the high interest rates associated with hard money loans.

With a real estate investment, you can write off a lot of the expenses related to your properties. Even though this is a significant benefit, some real estate Investors have a difficult time qualifying for a traditional loan. If you decide to go with a debt service coverage ratio loan instead, you may be able to qualify for a loan more easily.

Tax deductions can artificially reduce the income on your tax return, which might make it harder for you to qualify for a loan. Because you do not need to prove your income to us—and instead use your DSCR to qualify—you may have an easier time qualifying for this type of loan.

Calculating your debt service coverage ratio is fairly straightforward. Simply take your property’s annual gross rental income and divide it by its debt obligations, and this provides you with your debt service coverage ratio.

When we calculate DSCR, we will examine your annual rental income by reviewing lease agreements. Then, we will compare this to the rent schedule from the appraiser. We will use the lower of the two values. If you can prove to us that you have a 12-month rental income history that is higher than these numbers, we can use that instead. If you are investing in a short-term rental we can use AirDNA comparables as STR income.

To calculate your annual debt, we will take a look at your annual principal, interest, home insurance, taxes, and HOA fees. Looking at these figures will allow us to calculate the total debt obligations tied to the property.

With all of this information, we can calculate the DSCR, which in turn helps us determine the loan amount, interest rate, and loan terms you qualify for.

DSCR loans are specifically intended for real estate investors who are interested in purchasing income-producing properties. Both first-time investors and seasoned investors can qualify for DSCR loans in Pennsylvania, although having prior real estate investment experience can help you during the underwriting process. Additionally, Pennsylvania DSCR loans can be used to finance both long-term rentals and short-term vacation rentals.

Those applying for a DSCR loan must also meet certain other minimum requirements in order to qualify:

• DSCR: Interest rates are best for borrowers who have a good DSCR of 1.25 or above, but we can fund loans for borrowers with a DSCR below 1.0 as well.
• Credit score: Borrowers must have a minimum credit score of 620.
• Minimum loan amount: The minimum DSCR loan amount is $100,000, while the maximum loan amount is $20,000,000.
• Appraisal: Properties must undergo an appraisal to determine market value and evaluate projected rental income.
• Down payment: Borrowers must provide a minimum down payment of 20% to get a DSCR loan in Pennsylvania. Note that the down payment requirement may be higher depending on the strength of the borrower’s DSCR and other financial metrics.

In addition to DSCR loans in Pennsylvania, we offer a range of other non-QM and investment property loans. If you are looking for non-traditional financing options, some of the loans we offer at Griffin Funding include:

• Asset-based loans: With an asset-based loan, you can leverage your liquid assets to qualify for home financing rather than being subject to traditional income verification.
• Bank statement loans: We have loans that you can apply for using your bank statements, which can help you avoid traditional income verification processes.
• Private money loans: Private money loans allow borrowers to quickly access large sums while using the property as collateral.
• Jumbo loans: If you are interested in applying for a non-conforming loan with a much higher limit, reach out to us to learn more about our jumbo loans.
• Interest-only loans: We provide loans that allow you to pay only the interest and none of the principal for a predetermined period of time.

As you consider how you will finance a real estate purchase, you need to think carefully about which option is right for your needs. At Griffin Funding, our team can help you determine which loans you qualify for and which are best-suited for your particular needs.

In the end, a DSCR loan in Pennsylvania can be a great option for investors who want to expand their real estate investment portfolio. At Griffin Funding, we are proud to offer a wide variety of loans that could help you qualify for a mortgage. With tools such as the Griffin Gold app and a team full of experienced mortgage professionals, we provide everything you need to achieve your real estate investment goals.

If you would like to apply for a loan through our team, reach out to us today! We can help you determine the right financing option for your needs and guide you through the mortgage process.