Looking for an easier way to finance your investment property in Michigan? A DSCR loan allows you to qualify based on rental income rather than personal earnings, making the process hassle-free. With this approach, the property covers its own expenses, and a well-performing rental can even generate extra income after mortgage payments.
Whether you’re targeting short-term rentals in Detroit or long-term investments in Grand Rapids, DSCR loans offer a flexible financing solution tailored for real estate investors.
Get started with a DSCR loan in Michigan through HomeAbroad and expand your portfolio today!
Table of Contents
What is a DSCR Loan?
A DSCR loan (Debt Service Coverage Ratio loan) is a financing option designed for real estate investors. Unlike traditional loans that focus heavily on your personal income and credit score, DSCR loans prioritize the income potential of the property you’re investing in.
Since DSCR loans offer more flexibility by focusing on rental income rather than your personal financials, lenders typically set interest rates slightly higher than conventional mortgages—usually 1-2% more. You can check the latest DSCR loan interest rates here.
With Michigan’s average rental yield at 6.9%, real estate investors can leverage this loan to acquire income-generating properties while maximizing returns in key markets like Detroit, Grand Rapids, and Ann Arbor.
How to Calculate the DSCR Ratio?
The Debt-Service Coverage Ratio (DSCR) determines whether a property’s rental income is sufficient to cover its mortgage payments. Lenders use this ratio to assess risk and loan eligibility.
Here is the DSCR Formula:
Example
Most lenders require a DSCR of 1.0 or higher, meaning the property generates enough rental income to cover the mortgage payment.
For investors who don’t meet the standard DSCR ratio, our No-Ratio DSCR program allows qualification with a DSCR as low as 0.75, requiring a higher down payment and interest rates compared to the ideal scenario.
You can also learn and become an expert in calculating DSCR through this guide on DSCR calculator.
Requirements of DSCR Loan in Michigan
HomeAbroad offers DSCR loans to both domestic and international investors—here are the requirements for each.
| Features | Domestic Investors | Global Investors |
|---|---|---|
| DSCR Ratio | 1 or Higher (No Ratio DSCR Program Available) | >= 1 for best terms, <1 eligible with higher down payment |
| Credit Score | Minimum 620 | No US credit needed |
| Down Payment | 20% | 25% |
| LTV Ratio | Up to 80% for Purchase and Rate/Term Refinance, Up to 75% for Cash Out Refinance | Up to 75% for Purchase and Rate/Term Refinance, Up to 70% for Cash Out Refinance |
| Cash Reserves | 2 months | 6 months |
| Property Use | Investment properties (residential and commercial) | Investment properties (residential and commercial) |
| Loan Amount | $75K – $10M | $75K – $10M |
With years of experience assisting both domestic and global investors, HomeAbroad has become a trusted expert in providing tailored DSCR loans and an AI-driven property search platform. Our end-to-end support ensures investors find high-yield properties and secure the best financing solutions to maximize their returns.
Where We Lend DSCR Loan in Michigan
- Detroit
- Ann Arbor
- Grand Rapids
- Lansing
- Flint
- Kalamazoo
- Warren
- Dearborn
- Rochester Hills
- Troy
- Farmington Hills
- Sterling Heights
- Novi
- Livonia
Let’s look at the success story of one of our clients who secured a DSCR loan to achieve their investment goals in Michigan.
Case Study: How James Secured his Investment Property in Michigan
James, a real estate investor, wanted to expand his portfolio by purchasing an income-generating property in Michigan. With the guidance of Steven Glick an expert loan officer at HomeAbroad he smoothly secured a DSCR loan tailored to his needs.
Property Details:
Location: Grand Rapids
Property value: $245,000
Monthly Rent: $2,100
Loan Details:
Loan Amount: $183,750
Down Payment: $61,250 (25%)
Loan Term: 30 years fixed
Monthly Mortgage (PITIA): $1,603
DSCR Calculation:
DSCR = Gross Rental Income / PITIA
DSCR = $2,100/ $1,603
DSCR = 1.31
This investment turned out to be a smart financial decision for James. With a DSCR of 1.31, the property not only covers its mortgage payments but also generates positive cash flow of $497.
HomeAbroad has helped countless real estate investors secure the right financing to grow their portfolios. With tailored mortgage solutions and expert-backed guidance, we make the investment journey smooth and aligned with your financial goals.
Having worked with investors across different markets, I know that securing financing can be a major hurdle. DSCR loans simplify the process by letting the property’s income speak for itself, making real estate investment more accessible and scalable.
Steven Glick, (Director of Mortgage Sales, HomeAbroad)
Top Places to Invest in Michigan with DSCR Loan
Michigan offers strong investment potential, with an average rental yield of 6.9%, making it a great market for real estate investors. With Michigan’s strong rental yields and DSCR loans, investors can acquire properties that cover their mortgage and generate positive cash flow.
Here are some top investment cities in Michigan:
City | Rental Type | Rental Yield |
|---|---|---|
Detroit | Long-Term | 21.2% |
Traverse City | Short-Term | 16.7% |
Ann Arbor | Short-Term | 15.6% |
Grand Rapids | Long-Term | 7.8% |
Kalamazoo | Long-Term | 6.8% |
Need help finding the right investment property? Our AI-driven investment property search platform can help you discover high-performing rentals in Louisiana or anywhere in the US.
Get a HomeAbroad DSCR Loan in Virginia
HomeAbroad is a one-stop PropTech and FinTech platform that helps both global and US investors secure tailored DSCR loans with competitive rates and flexible terms to maximize investment returns. Here’s what sets us apart:
- Flexible Loan Options – DSCR loans available even for properties with a DSCR as low as 0.75.
- No US Credit History Required – Perfect for foreign nationals and international investors.
- AI-Driven Investment Property Search Platform – Discover cash flow positive properties that pays for themselves and generates additional income.
- Expert Guidance – Our team simplifies complex processes, ensuring you understand every step.
- Fast Processing – We value your time and strive for quick approvals and closings.
With HomeAbroad, you get tailored DSCR loans, expert guidance, and smart tools to help you find and finance profitable properties. Whether you’re a local investor or a global investor, we’re here to support your journey every step of the way.
Get a DSCR loan with HomeAbroad today and start growing your real estate portfolio!
Pre-qualify for a DSCR Loan in a Few Clicks.
No Paystubs, W2s, or Tax Returns Required.
Frequently Asked Questions
Is it hard to get a DSCR loan in Michigan?
No, getting a DSCR loan in Michigan is easier than traditional loans because it doesn’t require personal income verification. As long as the property’s rental income covers the mortgage, investors can qualify without W-2s, tax returns, or pay stubs.
How long does it take to get approved for a DSCR loan in Michigan?
At HomeAbroad, we make the DSCR loan approval process seamless, ensuring investors secure financing within 30 days. Our streamlined approach helps you close deals faster and grow your real estate portfolio with ease.
What documents do you need for a DSCR loan?
Generally, you will need documents such as investment property appraisals, rental agreements, a 1007 rent schedule, and other paperwork related to the loan application process.
How Does HomeAbroad Help?
"Unlocking US real estate for the world with our tailored offerings."
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