Michigan DSCR Loan Lenders for Long-Term and Short-Term Rentals
Are you seeking long-term private financing for a residential rental property in Michigan? On this page you'll find a list of lenders that offer these “DSCR” loans for single family homes, condos, and 2-4 unit rental properties in Michigan’s urban areas. Some lenders consider vacation rentals (aka short-term rental or STR). The maximum loan-to-value is 80%. For a purchase, investors need a minimum down payment of 20%, and it could be higher depending on the debt service coverage ratio (DSCR), borrower’s credit score and location. The minimum credit score is 680 for most lenders. The loans terms range from 5 to 30 years.Searching...
Sorry, your search returned no results.
Michigan DSCR Loan Interest Rates
According to the loan documents software company, Lightning Docs, the average interest rate for Michigan DSCR long-term rental loans in the 1st quarter of 2024 was 8.51%. The average loan amount was $92,608. These stats are the average of 80 loans funded for residential rental properties in Michigan between January 1, 2024 and March 31, 2024 by multiple lenders that use Lightning Docs as their preferred software provider to prepare loan documents.
Funded DSCR Long-Term Rental Loans in Michigan
RCN Capital, a national direct private lender, funded a $136,000 1st lien position long-term rental loan for the acquisition of a 4-unit rental property in Ironwood, MI. We funded 74% of the $170,000 purchase price, while the Borrower contributed 26% cash at closing. The subject property was appraised for $183,000 as-is and was vacant when we funded the loan. A Collateral Desktop Analysis (CDA) was ordered and the value was confirmed with an appraisal. The appraiser estimated the market rent to be $3,450 per month. The property is approximately 3,475 square feet. The Borrower had excellent credit with a mid-score of 787 and bank statements that evidenced sufficient liquidity. The total loan amount was 80% loan-to-cost and 74.3% loan-to-value. The interest rate was 7.63% with amortized payment. and we charged 2.25% origination points. The loan term was set at 30 years. This DSCR rental purchase loan was funded in March 2024.
DSCR Equity Cash-Out Loan for Single-Family Rental Portfolio in Grand Rapids, Michigan
$554,934
RCN Capital, a national direct private lender, funded a $554,934 1st lien position equity cash-out loan secured by a portfolio of 4 single-family rentals in Grand Rapids, Michigan. The value of all 4 properties was estimated at $770,700 so our loan-to-value was 72%. The Borrower is an experienced investor who was looking to cash out equity on their free-and-clear rental homes. The Sponsor had excellent credit with a mid-score of 748, and their bank statements reflected the balance of over $250,000 in liquidity to close this blanket project. The loan was structured at 72.6% LTV presenting 1.24 DSCR with a 5-year prepayment penalty. The homes were in good condition and leased to tenants. The Borrower plans to continue leasing the properties and will eventually refinance when interest rates come down. The interest rate was fixed at 8.13% and we charged 2.25% origination points. The loan term was set at 30 years. This DSCR equity cash-out loan was funded in July 2023.
The Portfolio:
- 1838 Silver Ave SE, Grand Rapids, MI 49507
Purchased for $21,500 in Oct 2012. Appraised for $170,000 and currently leased for $1,150 per month which is slightly below market rent at $1,200/month. - 120 Burt St SE, Grand Rapids, MI 49548
Purchased for $26,500 in June 2013. Appraised for $190,000 and currently leased for $1,600 per month. - 416 Crosby St NW, Grand Rapids, MI 49504
Purchased for $137,000 in April 2021. Appraised for $190,000 and currently leased for $1,850 per month. - 2673 32nd St, SE, Kentwood, MI 49512
Purchased for $164,000 in June 2022. Appraised for $218,000 and currently leased for $2,000 per month.