DSCR Loans in South Carolina

Griffin Funding can help individuals all over South Carolina, including the following cities:

If you’re trying to acquire one or multiple rental properties, DSCR loans may be your answer. Or, if you’re self-employed and don’t have a W2 and pay stubs that help prove income, non-QM loans like South Carolina DSCR mortgage loans can be a great alternative.

In South Carolina, where the median home value was approximately $297,794 in 2024 — reflecting a 3% increase over the previous year — a DSCR loan can be particularly beneficial. This is because DSCR loans provide an alternative way to secure financing based on the income generated by the property rather than traditional income documentation.

Non-QM loans are designed to assist borrowers who can’t meet the criteria for a traditional mortgage. DSCR loans, in particular, can be an excellent option for those who invest in real estate or who want to secure a loan based on the cash flow generated from an investment property.

The DSCR determines your annual rental income compared to the annual debt obligations of the property you want to invest in. If you make enough or more than enough in rental income to pay for your mortgage, a lender will know it is safe to loan you money. The DSCR determines the risk of a mortgage loan without needing W2s, tax returns, or pay stubs. Keep in mind, though, that a minimum credit score is required in order to qualify.

To calculate the DSCR, the net operating income is divided by the total debt service (including the principal and interest payments on a loan). Here is a better breakdown of how lenders calculate DSCR to determine the eligibility of DSCR loan borrowers in South Carolina:

1. The lender determines your gross rental income by taking the lease agreement and having an appraiser use a Single-Family Comparable Rent Schedule (Form 1007) to estimate the rental rate. The lower of the two numbers is chosen. Borrowers may also use 12 months of rental income history to qualify instead of using an appraiser.

2. Next, the annual debt is calculated. This is the amount you pay each year for a rental property. The annual debt includes principal, taxes, interest, insurance, and, in some cases, HOA fees.

3. Finally, the annual rental income is divided by the annual debt. This provides the DSCR number. If the two numbers are the same, the DSCR is 1. If the income is twice as much as the annual debt, the DSCR is 2, and so on.

If you’d like to take the math out of the equation, Griffin Funding offers an easy online DSCR calculator that will quickly help you find your debt service coverage ratio.

South Carolina DSCR loans offer multiple advantages. They are a flexible option for those who struggle to qualify for traditional mortgages and are also helpful when you want to invest in several properties. But they may not be for everyone. Here are some pros and cons of a DSCR loan in South Carolina:

Pros:

• The time for closing may be quicker.
• There is no verification of job or income history.
• South Carolina DSCR loan programs work for new and experienced investors.
• There is no reserve requirement for cash-out loans, and 6 months of reserves are required on other loans (unless the DSCR is below 1).
• You can obtain loans of up to $5,000,000.
• The number of properties is unlimited.
• They include short-term (Airbnb) and long-term rentals.
• DSCR mortgage loans in South Carolina are available to new and experienced investors.

Cons:

• South Carolina DSCR interest rates may be higher than conventional mortgage rates.
• If purchasing a high-value property, the average down payment of 20%-25% may require substantial cash reserves.
• A lower DSCR may command a higher down payment or less favorable rates.
• Depending on the local real estate market or if your investment properties are vacant, meeting the minimum DSCR requirement can be difficult.

Loans and their requirements differ from state to state, but the requirements for DSCR mortgage loans in South Carolina are generally the same as in any other state. The biggest difference is in property values, which could change rental rates in that area.

Your DSCR ratio is the main requirement for obtaining the loan. While you don’t have to worry about prior tax returns, W2s, or pay stubs, you must meet the minimum credit score.

Lenders require that you meet a certain threshold to qualify for a DSCR loan program in South Carolina. At Griffin Funding, we offer DSCR loans to borrowers with a DSCR of less than 1. However, a good DSCR is typically above 1.00, and a higher number will help you get more competitive approval terms.

It is also important to note that 12 months of verifiable reserves are needed if your DSCR is below 1, so you should have cash or other liquid assets you can quickly access.

Remember that Griffin Funding has other loan options available if you don’t qualify for a DSCR loan in South Carolina. Bank statement loans can work well for borrowers who may not be able to qualify for a mortgage using tax returns and pay stubs but can demonstrate a proven history of deposits through their bank statements.

Like a traditional mortgage, a down payment is required to obtain a DSCR loan. A down payment reduces the lender’s risk by providing a large sum of money that allows you to purchase the property. The lowest down payment accepted for a DSCR loan obtained through Griffin Funding is 20%.

Because DSCR loans in South Carolina are available to new and experienced investors, the application process is quick and simple.

You’ll start with an online application and provide basic details about the investment property. An agent will then reach out and help calculate your DSCR, review your personal credit, and see what financing options may be available to fit your needs and budget. If you’re looking to improve your personal credit and begin building an action plan to obtain a DSCR loan, you can download the Griffin Gold app today to get started now.

When you’re ready to start your home search, working with a mortgage lender in South Carolina who specializes in the process is essential. Griffin Funding offers competitive rates and terms for DSCR mortgage loans in South Carolina so you can invest confidently. Use our website to apply now for a DSCR loan in South Carolina and expand your real estate investment portfolio.