Direct Lender for DSCR Long-Term Rental Financing

Griffin Funding is a direct mortgage lender for residential rental properties. Qualify for a loan without using your tax returns. As a real estate investor, you can avoid high rates and high points of private loans, lengthy approval processes, and strict lending criteria with a debt service coverage ratio loan, which is a type of no-income loan. Qualify for a loan based on your property’s cash flow, not your income.

  • Both long-term and short-term rentals are eligible (Airbnb, VRBO, etc.)
  • No income or job history verification required
  • No limit on the number of properties
  • Loan amounts up to $5,000,000
  • Cash Out Refinance available
  • As little as 20% on down payments
  • Minimum credit score required
  • Interest-only loan option available
  • Suited for new and seasoned real estate investors
  • No reserves required on cashout loans
    • 6 months required on all other loans unless the DSCR ratio is less than 1.0

Please Note: We do NOT offer rental loans in rural areas.

Property Geographic Area Details
AZ, CA, CO, CT, FL, GA, HI, ID, IL, MD, MI, MT, NH, NC, NM, NV, OR, SC, TN, TX, VA, WA
Loan Amounts
$100,000 to $5,000,000
Interest Rates
3.0% to 7.5%
Loan Terms
360 months to 360 months
Origination Fees
1% to 3%
Lien Position
1st
Collateral Types
  • Residential Property
Loan Purpose
  • Investment Acquisition
  • Investment Refinance
Property Occupancy
  • Vacant
  • Tenant Occupied 100%

Maximum Leverage

Purchase Long-Term
Max LTP Residential: 80%
Refinance Long-Term
Max LTV Residential: 80%

Debt Service Coverage Ratio (DSCR) Financing for Residential Rental Properties

Qualify for a home loan without using your tax returns. As a real estate investor, you can avoid high rates and high points of private loans, lengthy approval processes, and strict lending criteria with a debt service coverage ratio loan, which is a type of no-income loan. Qualify for a loan based on your property’s cash flow, not your income. Securing a debt service coverage ratio loan can help you expand your investment portfolio easier than ever before.

What Is a Debt Service Coverage Loan?
A DSCR loan is a type of non-QM loan for real estate investors. Lenders use a DSCR to help qualify real estate investors for a loan because it can easily determine the borrower’s ability to repay without verifying income.

How Does a DSCR Loan Work?
Because real estate investors write off expenses on their properties, some may not qualify for a conventional loan. The debt service coverage ratio loan allows these individuals to qualify more easily because they don’t require proof of income via tax returns or pay stubs that investors either don’t have or that don’t represent their true income due to write-offs and business deductions.

What Is the Debt Service Coverage Ratio (DSCR)?
The Debt Service Coverage Ratio is a ratio of a property’s annual net operating income and its annual mortgage debt, including principal and interest. Lenders use DSCR to analyze how much of a loan can be supported by the income coming from the property as well as to determine how much income coverage there will be at a specific loan amount.

What Is a Good DSCR Ratio?
Many lenders will require a 1.25 DSCR to qualify for a DSCR mortgage loan. However, Griffin Funding allows real estate investors to qualify for a loan with a DSCR as low as .75 so that they can qualify with the cash flow of your property. Please note that interest rates are better on DSCR ratios of 1 or above and that a DSCR ratio of less than 1 requires 12 months of reserves. When considering what a good DSCR ratio is, lenders need to ensure that a borrower is able to pay back the loan.

Why Does DSCR Matter?
The DSCR lets the lender know how to determine a borrower’s ability to pay off their DSCR mortgage. Lenders must forecast how much a real estate property can rent for so that they can predict a property’s rental value. If you have a DSCR of less than 1.0, it means that a property has potential for negative cash flow. DSCR loans can still be made on properties with less than a 1 ratio however they usually are purchase loans with home improvements / upgrades / remodeling to be made to increase the monthly rent or for homes with high equity and potential for higher rents in the future. You also can potentially get the property above a 1.0 ratio with a DSCR interest only loan.

DSCR Formula Calculation

The debt service coverage ratio formula is the annual gross rental income divided by the debt obligations of the property.

Annual Gross Rental Income/Debt Obligations =
Debt Service Coverage Ratio

  1. To find your Gross Rental Income we take your annual rental income based on your lease agreement and the appraiser’s comparable rent schedule (form 1007) and use the lesser of the two. In some cases, if you can prove a twelve month history of rental income you can qualify off of that rather than the appraiser’s market rent.
  2. Next, you’ll need to find your annual debt. Your annual debt for loan qualification purposes equals the total annual principal, interest, taxes, insurance and HOA (if applicable) payments. Annual Debt = Total Annual PITI payments
  3. Next, you’ll divide your annual gross rental income by your annual debt for your ratio. DSCR = Annual gross rental income/Annual Debt

Please note that Net Operating Income (NOI), Capitalization Rate (Cap Rate), Cash on cash return (COCR), Return on Investment (ROI) are not considered for mortgage loan qualifying purposes.

Example of Debt Service Coverage Ratio Calculation
A real estate investor might be looking at a property with a gross rental income of $50,000 and an annual debt of $40,000. When you divide $50,000 by $40,000, you get a DSCR of 1.25, which means that the property generates 25% more income than what is necessary to repay the loan. This also means that there is a positive cash flow in the lender’s eye.

Property Types

  • 2-4 Units Residential
  • Condominium
  • Single Family Residence

Loan Types

  • Residential Long-Term Rental

Specialty Loan Types

  • Residential Long-Term Rental
  • Residential Short-Term Rental
  • Vacation Rental
Borrower must have at least 20% cash to contribute to the purchase. We do not all allow seller financing or junior liens.

Max Loan-to-Purchase Price

80%

Borrower Must Have Property Under Contract

yes

Will Provide Proof of Funds Letter

no

Will Consider Lending on Purchase from Auction

no

Allowed Source of Borrower’s Equity

  • Own Cash

Minimum Loan Amount

$100,000

Maximum Loan Amount

$5,000,000

Minimum Interest Rate

3.0%

Maximum Interest Rate

7.5%

Minimum Origination Fee

1%

Maximum Origination Fee

3%

Minimum Loan Term

360 months

Maximum Loan Term

360 months

Minimum Debt Service Coverage Ratio

0.75

Will Lend on a Portfolio of Rentals

No

Details and Requirements

Typical Closing Time (Days)

30

Fastest Closing Time (Days)

14

Payment Structure
  • Interest Only
  • Amortized
Pre Payment Penalty

yes

There is a pre-payment penalty if the loan is paid off within 3 years.
Will lend to a foreign national

yes

Will Allow Junior Position Mortgage(s) Behind Our Senior Mortgage

no

Will Consider Collateralizing Multiple Properties in One Loan

no

Will Consider Equity Joint Venture

no

Borrower Entity Types Considered
  • LLC
  • Limited Partnership
  • Corporation
Documentation Required
  • Credit Report
  • Bank Statements
  • Financial Statements
  • Loan Application
Personal Guaranty (Recourse) Required
Always
Credit Check Required

yes

Minimum Credit Score Required

580

Appraisal Required for Residential Property

Always

Broker Price Opinion (BPO) Accepted for Residential Property

Get In Touch

Griffin Funding Rental Loans pays us to be listed, so there is no fee to connect with them directly. Share your loan request, send a simple email, call, or visit their website.

Stay Informed About Private Lending

Receive our monthly newsletters with valuable insights and industry updates
subscribe-illustration

Griffin Funding is a mortgage company that helps investors secure a new rental loan or refinance an existing mortgage. Our team leverages cutting-edge technology to originate loans that meet your particular needs. Contact Griffin Funding today to access top-tier customer service and highly competitive interest rates.

Keep reading to learn more about us and why we make an excellent partner in securing a home loan.

Our Mission
At Griffin Funding, our mission is to serve our customers with honesty, integrity, and competence while providing the lowest interest rates and closing costs we possibly can. We always strive to be transparent with all of our clients and provide excellent customer service so that you can be confident that you’re getting a great deal on your home loan. What sets us apart from other mortgage companies is our ability to work with you to create highly personalized home loans that are tailored to your specific financial situation. Reach out to us today to find out more about the wide selection of mortgage products we offer and how you can get started in buying a home.

What to Expect with Griffin Funding

When you work with Griffin Funding, the first step in the process will be speaking with one of our mortgage strategists, who will evaluate the best loan options for you and find the lowest interest rate you qualify for based on your credit score and other determining factors. We will provide you with a personalized analysis that lays out your loan options, so you can compare your options and decide which one best suits your needs.

Then, you’ll complete a loan application either over the phone or through our secure digital mortgage platform. Once you’ve completed the loan application, we can lock in your interest rate and help you along through the rest of the mortgage process.

At Griffin Funding, we strive to tailor home loans to your unique situation while keeping our lending process as straightforward as possible. If you have any questions about us or concerns during the mortgage process, you can always reach out to us for support.

Griffin Funding is a Licensed Mortgage Banker

Griffin Funding holds licenses in over a dozen US states. Below is a list of the specific licenses we hold in each state:

  • Arizona: Licensed as a Mortgage Banker with the Arizona Department of Financial Institutions No. 0939726
  • California: Licensed by the Department of Financial Protection and Innovation (DFPI) under California Finance Lender Law (CFL) No. 60DBO-44274; DRE – 01943169
  • Colorado: Mortgage Company Registration – Regulated by the Division of Real Estate – 1120111
  • Florida: Licensed as a Mortgage Broker by the Office of Financial Regulation No. MBR3384; Licensed as a Mortgage Lender by the Office of Financial Regulation No. MLD1944
  • Georgia: Georgia Residential Mortgage Licensee – Licensed as a Mortgage Lender by the Department of Banking and Finance No. 1120111
  • Hawaii: Licensed as a Mortgage Loan Originator Company No. HI-120111
  • Idaho: Licensed as a Mortgage Broker/Lender No. MBL-2081120111
  • Maryland: Licensed as a Mortgage Lender by the Commissioner of Financial Regulation No. 06-24746
  • Michigan: 1st Mortgage Broker/Lender License No. FL0023397
  • Montana: Mortgage Lender License No. 1120111
  • Oregon: Mortgage Lending License No. 1120111
  • Tennessee: Mortgage License No. 214045
  • Texas: 1120111 (See licensing page for full Texas disclaimer)
  • Virginia: Licensed as a Mortgage Lender and Broker by the Virginia State Corporation Commission No. MC-7294; NMLS ID No. 1120111
  • Washington: Licensed by the Department of Financial Institutions under the Consumer Loan Act No. CL-1120111

Why Work with Us?

Buying a rental property is a major even in your wealth-building journey. However, for many people the mortgage process can appear complicated and overwhelming. One important thing to know about us is, when you work with Griffin Funding, you’ll get personalized assistance from knowledgeable loan specialists who can help you secure a great loan at a competitive interest rate. We offer a number of financing, so you can find exactly what you’re looking for. Plus, our online application makes applying for a home loan quick and easy.

License

NMLS ID 1120111

Company Size (Number of Employees)

52

Year Established

2013

Associations

  • Mortgage Bankers Association

Office Locations

2445 5th Avenue, Suite 300, San Diego, California 92101

Primary Capital Source
  • Own Funds
  • Private Equity Funds
  • Hedge Funds
  • Life Insurance Companies
Loan Structure for Majority of Loans
  • Own Balance Sheet
  • One Investor One Loan
Percentage of Loans Secured by Residential Property

100%

Get In Touch

Griffin Funding Rental Loans pays us to be listed, so there is no fee to connect. Share your loan request, send a simple email, call, or visit their website.

Stay Informed About Private Lending

Receive our monthly newsletters with valuable insights and industry updates
subscribe-illustration

Create a Loan Request

Be more efficient with your lender search. Provide the loan details once, save it, and then share it with multiple lenders.

Contact Griffin Funding Rental Loans by whichever method you choose.

If you submit a loan request or email, it will be sent to the lender, and they will reply to you directly. A copy will be saved in our database. We will not share your information unless you ask us for recommendations.

BEFORE YOU CONTACT THIS LENDER

Our Minimum Loan Amount Is

$100,000

What We Do

  • DSCR Rental Loans
  • Vacation Rental Loans (Airbnb/VRBO)
  • Up to 80% Loan-to-Value

Not Available

  • NO Rural Areas
  • NO Seller Financing
  • NO Commercial Properties

Send an email to Griffin Funding Rental Loans