Starting in 2018, several private / hard money lending companies on our platform began offering long-term financing to real estate investors that own single family and 2-4 unit rental properties. This is also known as “DSCR” (debt service coverage ratio) loans since one of the main qualifications is for the property to have positive cash flow in order to make the mortgage payments, plus taxes, insurance and some extra cash to cover maintenance or potential vacancies.
This has become a very popular alternative loan option for property investors that are unable to get financing from a bank. The interest rates are slightly higher than what most banks offer but not as high as short-term private/hard money loans.
Top Lenders for Long-Term Rental Loans in the USA
Below is a list of the top private/hard money lending companies listed on Private Lender Link that offer long-term rental loans. All of them lend nationally, with the exception of a few states that most private lenders avoid, mainly due to strict licensing requirements.
Office Location: South Windsor, CT
Year Established: 2010
Lending Areas: Nationwide except AK, MN, ND, NV, OR, SD, VT
RCN Capital was the first lender on our platform to offer the 30-year rental product in 2018. They are one of the largest private/hard money lenders in the country for residential real estate investors. The company has over 60 employees and runs a very efficient operation. In addition to being at the forefront of DSCR loans, they were also one of the first lenders in the space to offer a white label correspondent program to mortgage brokers and other lenders.
RCN Capital makes a big effort to establish relationships with brokers and real estate investors throughout the country. They attend and sponsor every single conference in the industry, we have spent a lot of time with their CEO and marketing team. Everyone we’ve met at RCN is very professional and friendly. We are continually impressed with how this company has grown and continues to be a top lender in the private lending industry.
Office Location: Costa Mesa, CA
Year Established: 2004
Lending Areas: Nationwide except ID, MN, NV, ND, SD, VT
American Heritage Lending was focused on consumer mortgages before switching over to investment property, so they are very experienced with underwriting DSCR and long-term loans. They have a small operation but are still able to close deals nationally while providing excellent service. We have referred a number of people to American Heritage, and many have reported that they received excellent service and fast closings. Private Lender Link’s CEO has visited the company’s office in Orange County and spent time with the two principals. Check out the videos on their profile to learn more about them.
Office Location: San Francisco, CA
Year Established: 2016
Lending Areas: AL, AK, CA, CO, CT, DC, GA, FL, HI, IL, IN, MA, MO, NJ, NY, NC, OH, OK, PA, SC, TX, VA, WA
Conventus is one of the fastest growing companies listed on Private Lender Link. They funded over $1 billion in loans between 2016 to 2019, which is very impressive for any private lender. Although Conventus only started offering long-term rental loans in mid-2020, we included them on this list because of the positive feedback we’ve receive from real estate investors and mortgage brokers. They have lots of capital and a great infrastructure to efficiently fund DSCR loans for residential real estate investors.
Conventus has always been creative with their pricing structures and loan programs. For long-term rental loans, they mainly qualify on DSCR and a minimum FICO score of 680. Tax returns and income verification are not required, and they welcome foreign nationals. They consider vacant properties and short-term rentals, at a lower LTV. Borrowers have the option to get a 30-year fixed rate or an adjustable rate – 5/1 or 7/1 fully amortized over 30 years.
We started doing business with Conventus when they had just 5 employees, and it’s been great to watch them grow. It seems like they’ve been very successful because of their competitive pricing and excellent customer service.
Office Location: Bethesda, MD and Pasadena, CA
Year Established: 2012
Lending Areas: Nationwide except DE, ID, ND, NV, SD, VT
Temple View Capital has been listed on Private Lender Link since 2018 and starting offering long-term rental loans in 2019. They are very well capitalized and were one of the few national lenders that continued to lend through March and April 2020 when most others had halted lending.
Click the buttons to view each lender’s profile. Please note that these profiles include guidelines for short-term loans as well. On the Lending Guidelines section, scroll down about halfway to find their criteria/terms for long-term rental loans.
Here are some of the typical guidelines and characteristics of these DSCR loans:
- Maximum LTV is typically 75%
- Must be tenant-occupied or ready to rent
- 30-year loan term
- Interest Rates range from 5% to 8%
- Most lenders charge 1 to 3 points
- Prepayment penalty typically charged if paid off in less than 3 years
- Interest-Only payments
- Borrower credit score must be higher than 640
- Appraisal always required
- Personal guarantee typically required
Contact us if you’d like any lender recommendations for long-term or short-term investment property loans in the United States.