Investor Cash Flow Loan Program
Grow Your Real Estate Investments! Take an Investor Cash Flow Loan
Are you a Real Estate investor who is hoping to maximize your earning potential? Then we’re excited to present you with the Investor Cash Flow Loan Program for the purchase or refinance of an investment property without having to document your income to qualify. We will qualify you off the cash flow of the property you are buying or refinancing. Call 302-703-0727 to get started today or you can APPLY ONLINE.
Now What Is an Investor Cash Flow Loan aka DSCR Loan?
The Investor Cash Flow Mortgage allows a real estate investor to use the cash flow on the subject property to be used to qualify for the new mortgage loan. The program covers loans for non-owner occupied properties between one and four units. No tax returns or employment information is required to qualify for the loan. There is no limit to the number of financed properties. This innovative program can be used effectively to build a portfolio of income generating properties.
The debt service coverage ratio (DSCR) of the subject property is used to calculate the funds that can be used to qualify as follows:
- DSCR is defined as gross rents divided by qualifying PITI & HOA. 100% of the rents can be used for DSCR.
- DSCR must be greater than or equal to 1. (The gross rent must be greater than the mortgage payment including principal, interest, taxes, insurance, and any property association fees.)
DSCR Sample Calculation:
Benefits of a DSCR Investor Cash Flow Loan
- No personal income used to qualify
- No limit on number of properties financed
- No DTI restrictions
- Minimum 600 Credit Score to Apply
- No employment required on application
- Qualification based on property cash flow
- Loans up to $3.5 million (minimum loan $75,000)
- Up to 85% LTV on 1-4 Units Residential Properties (740 Min Credit Score)
- Up to 75% LTV on 2-8 Units Mixed Use Properties
- Up to 75% LTV on 5-10 Units Residential Properties
- 40 Year Term with Interest-only available
- Can Close in the name of LLC
- Up to 3% Seller Paid Closing Costs
- Can be Used for Purchase, Cash-out or Rate/Term Refinance
What Type of Properties are Eligible for This Loan?
The Investor Cash Flow home loan can be used to finance a variety of different types of properties. The Following is a list of the eligible property types:
- Single Family Homes
- 2 – 4 unit residential properties
- Mixed-Use Properties
- Warrantable Condos
- Non-warrantable Condos
What are The Requirements to Qualify for Cash Flow Loan?
In order to be eligible to qualify for this type of Real Estate Investor Loan, you must meet this minimum requirements to apply:
- Must have housing history and own a primary home already
- 2 years seasoning for Foreclosure, Short Sale, Bankruptcy, or Deed in Lieu of Foreclosure
- Minimum Credit Score is 600
- Must Be Purchasing an Eligible Property Type
- Must Have a 6 Month Reserve on Subject Property If Less than 25% Down
- Property MUST Meet Debt Service Coverage Ratio (DSCR) or Will Need 12 Months Reserve on Negative Cash Flow
- Max 85% LTV Minimum 740 Credit Score
- Max 80% LTV Minimum 660 Credit Score
- Max 75% LTV with 640-659 Credit Score
- No DSCR needed if minimum 700 FICO score and Max 75% LTV
- 6 Months Seasoning to Use Appraised Value on Cash-out or Rate/Term Refinance
- Standard Tradeline requirements. Need 3 tradelines reporting for a minimum of 12 months -OR- 2 tradelines reporting > 24 months; all with activity in the last 12 months.
If you want to get into the real estate investing game and hold properties for rental income, this is a great loan product for you. The Cash Flow Loan has nowhere near the restrictions Fannie Mae and Freddie Max have for non-owner occupied mortgage loans for real estate investors.
What are the Requirements for Closing in the Name of an LLC?
In order to close an Investor Cash Flow Loan in the name of an LLC, you must meet the following guidelines:
- LLC must have been formed only for the purchase or management of real estate.
- For Multi member LLCs with varying membership interest , a fully executed Board Resolution authorizing the borrower to enter the loan contract.
- Borrowers must personally guarantee the loan
What Documents are needed from the LLC?
- Operating Agreement to include authorization to borrower & designates signers.
- Certificate of Formation / Articles of Organization
- Certificate of Good Standing or equivalent document
- Certificate of Foreign Qualification of other qualification to operate in the state where business is being conducted (if entity is formed in a state other than where business is being performed)
- Name and Principal residence / home address that will be signing the Personal Guaranty if multiple members with greater than 20% interest
What about Pre-Payment Penalty?
Investor Cash Flow Loans have a standard pre-payment penalty of 3 years. The pre-payment penalty is 6 months of interest on excess of 20% of the original principle balance unless otherwise restricted by law.
You can Buy-Out the Pre-payment Penalty:
Rate Buyout – 2 year PPP .125% adjustment to rate, 1 year PPP .375% adjustment to rate, No PPP .500% adjustment to rate
Cost Buyout – .25% fee for 2 years; .75% fee for 1 year; 1.00% fee for No PPP;
How Do You Apply for an Investor Cash Flow Loan?
If you are interested in getting more information or would like to apply for an Investor Cash Flow Mortgage Loan, You can APPLY ONLINE HERE, or you can call John Thomas at 302-703-0727.
John R. Thomas – NMLS 38783
Certified Mortgage Planner – Primary Residential Mortgage, Inc.
302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office
248 E Chestnut Hill Rd, Newark, DE 19713