Choosing a lender is an important decision when purchasing an investment property. Investors should look beyond whether a lender offers DSCR financing and examine the specific terms, qualification requirements, property types, loan limits, and closing process.
A suitable DSCR lender should provide terms that align with the investor’s acquisition and holding strategy. Key factors to compare include the minimum DSCR requirement, maximum LTV, credit score requirements, loan term, prepayment penalty, entity closing options, and expected closing timeline. Investors should also determine whether the lender operates in the state where they plan to purchase.
For investors evaluating single family rental loans, property-level qualification can be particularly valuable. InstaLend calculates eligibility using the property’s rental income rather than personal employment income. The stated program requires no W-2s, tax returns, or employment history. It offers up to 80% LTV, a minimum 20% down payment, 30-year fixed terms, and a minimum DSCR of 1.0x.
Investors should also examine how rent is calculated. InstaLend states that its team reviews market rent rather than relying solely on an existing lease when calculating DSCR. This can be relevant when purchasing a vacant property or acquiring an investment that will be repositioned for rental use.
Finally, consider operational factors. A lender that supports LLC closings, offers a remote application process, and operates across multiple states can provide additional flexibility for investors building a diversified portfolio.
