CONTRIBUTED ARTICLE
Why Are You NOT Originating DSCR Loans? By Rocky Butani, Private Lender Link
T
he DSCR long-term rental
immediately sell to the secondary
loan product has been a
market, which has a huge appetite
blessing
for this product. Not all institutional
for
many
loan
originators over the past 15 months. While the fix & flip volume has dropped, there has been an enormous demand for rental financing. It’s been great to see many originators take advantage of this opportunity and hit loan volume records over the past year.
loan
buyers
consider
long-term
rental loans, but there are still plenty of options. Originators don’t even need a balance sheet for these loans. There are a few companies that offer a wholesale program to fund these loans with very attractive pricing. If you can find one that
These loans are fairly easy to originate if secured by one property. Most of the originators in our network have started advertising DSCR loans as part of their offering, while others have kept it as a private offering for their existing clients who typically flip houses. It’s so attractive, I’ve seen several companies that focus on large commercial real estate bridge
doesn’t charge points, it could be an ideal partnership. As tempting as it is, there are a lot of lenders in our network that have no interest in this hot new loan product. I’ve asked several lenders why they don’t want to originate DSCR loans. Below are a few of the responses (not in their exact words).
loans now offering DSCR loans for DSCR WILL BE SHORT-LIVED
residential properties.
Lender: The institutional capital
20
Many originators fund DSCR loans
will stop buying these loans in the
using
near future.
their
balance
sheet
and
