Griffin Funding
Griffin Funding is a San Diego-based private lender specializing in DSCR rental loans for residential properties. They offer financing without tax return requirements, enabling investors to qualify based on property cash flow, with loan amounts up to $5 million and flexible terms. Their services support both long-term and short-term rentals.
Common Loan Scenarios
- DSCR Rental Loans
- Vacation Rental Loans (Airbnb/VRBO)
- Up to 80% Loan-to-Value
Scenarios Not Considered
- Rural Areas
- Seller Financing
- Commercial Properties
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
- 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.
- 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
- 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.
Purchase Long-Term
Refinance Long-Term
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
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.
Griffin Funding – DSCR Rental Loans’s Lending Activity
Data Provided By Elementix
12mo Loan Volume
$404,076,289
12mo Loan Count
1,147
Total Loan Volume
$2,499,341,268
Average Loan Size
$412,025
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.
Office Locations
Our minimum loan amount is $100,000