“If you’re looking to buy a property or get some cash out fast, we don’t require all personal income mandates with this product that you would have with an owner-occupied home or even a second home. This allows for a smooth process, coupled with great pricing, ”said Will Fisher, division vice president at Arc Home.
With a 25% down payment, a DSCR loan will cover the rent for the entire mortgage payment, with no additional income required. A post-COVID-19 concern is a tenant’s ability to make payments.
“We considered this temporary potential situation due to a pandemic as our highest priority against which to isolate. We believe that with a intelligently designed reserve requirement and the requirement of proof of current rents to ensure mortgage payments are covered, this makes the product viable, while assessing risk appropriately, ”said Fisher said. An added benefit, however, is allowing borrowers to use cash from reserves.
Arc Home’s DSCR offers up to $ 2.5 million in loans and a ratio as low as 1: 1. Given the state of the economy after COVID, Fisher says this ratio puts them in a unique position in the market.
“We have seen the volumes of this product start to increase steadily since we launched it,” he said. “It was an extremely hot commodity until the pandemic hit because borrowers loved that it was a loan for business purposes, which comes with some qualifying benefits.”