Imagine securing a real estate loan without the hassle of income verification or strict debt-to-income (DTI) requirements. That’s exactly what a DSCR loan in New York offers. It is an investment-focused mortgage that qualifies you based on rental income instead of personal earnings.
With this strategy, the property’s rental income is used to cover mortgage payments, ensuring the investment remains self-sustaining. A well-performing rental can even generate surplus cash flow after expenses, providing investors with additional income and long-term financial growth.
Whether you’re a first-time investor or looking to expand your portfolio, a DSCR loan can help you finance your next property with ease.
Get started with a HomeAbroad DSCR loan and kickstart your investment journey today!
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Key Takeaways
1. DSCR loans in New York allow investors to qualify based on property cash flow, eliminating the need for personal income verification.
2. DSCR loans can be used to finance short-term rentals, long-term rentals, and multi-family properties, providing flexibility for investors.
3. DSCR loans do not require tax returns, W-2s, or pay stubs. Approval is based entirely on the property’s rental income potential.
What is a DSCR Loan?
A DSCR(Debt Service Coverage Ratio) loan is a mortgage designed for real estate investors, allowing them to qualify based on rental income instead of personal income. Unlike traditional loans that require W-2s, tax returns, and income verification, DSCR loans focus solely on the property’s ability to generate rental income.
This type of loan is ideal for investors looking to expand their portfolio without the restrictions of debt-to-income (DTI) requirements or employment history. DSCR loan provides a flexible and efficient financing solution in New York’s competitive real estate market.
With New York’s average rental yield at 8.47%, real estate investors can use DSCR loans to finance high-yield properties while maximizing returns in key markets like New York City, Buffalo, and Rochester.
How to Calculate the DSCR Ratio?
The Debt-Service Coverage Ratio (DSCR) helps lenders determine if a property’s rental income is sufficient to cover its mortgage payments. A higher DSCR indicates a lower risk for lenders, increasing the chances of loan approval.
Here is the DSCR Formula:
Example:
A DSCR of 1.38 indicates that the property generates more income than is needed to cover its debt obligations, ensuring a positive cash flow. At HomeAbroad, we typically require a DSCR of 1.0 or higher to qualify, meaning the property’s rental income should be sufficient to cover mortgage payments.
But what if your DSCR is below 1? I recently worked with an investor in New York who found a promising rental property but faced a challenge because his DSCR was only 0.89, slightly below the standard requirement. Instead of missing out on a great investment, I helped him secure financing through our No-Ratio DSCR loan, which allows qualification with a DSCR as low as 0.75.
Whether you’re scaling your portfolio or acquiring your first rental property, HomeAbroad offers tailored financing solutions to help you succeed even in cases where rental income is slightly lower than the mortgage payments.
DSCR Loan Interest Rates
Interest rates for DSCR loans in New York fluctuate based on market conditions, but investors can expect rates to be typically 1-2% higher than those for traditional loans.
Factors such as credit score, loan-to-value (LTV) ratio, and property location can also influence the rate you receive. Additionally, opting for a lower DSCR threshold or No-Ratio DSCR loan may come with slightly higher interest rates. Check the latest DSCR Interest Rates here.
DSCR Loan Requirements in New York
HomeAbroad offers tailored DSCR loans for both domestic and international investors, providing flexible financing options to suit various investment strategies. Here are the key 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 |
Where We Lend DSCR Loans in New York
- New York City
- Buffalo
- Rochester
- Albany
- Yonkers
- Syracuse
- New Rochelle
- Schenectady
- Binghamton
- Mount Vernon
- Ithaca
- Poughkeepsie
Case Study: Scaling a Real Estate Portfolio in New York with a DSCR Loan
Michael, an experienced real estate investor, wanted to expand his portfolio in New York but faced hurdles with traditional lenders due to debt-to-income (DTI) restrictions.
With the help of Steven Glick, he secured a DSCR loan that allowed him to qualify based solely on the property’s rental income.
Property Details:
Location: Buffalo, NY
Property Value: $275,000
Monthly Rental Income: $2,254
Loan Details:
Loan Amount: $251,920
Down Payment: $62,980 (20%)
Interest Rate: 7.2%
Loan Term: 30 Years
Monthly Mortgage Payment: $1,803
DSCR Calculation:
DSCR = Gross Rental Income ÷ PITIA
DSCR = $2254 / $1,803
DSCR = 1.25
With a DSCR of 1.25, Michael easily qualified for financing, ensuring the property generated positive cash flow while covering mortgage payments.
HomeAbroad’s expertise in DSCR Loans made the process seamless. Our team guided Michael through property selection, financing, and closing, ensuring he secured the best DSCR loan terms tailored to his investment strategy.
With years of experience working with real estate investors, I’ve seen many face challenges due to high DTI ratios. DSCR loans offer a practical solution by focusing on a property’s rental income rather than personal earnings.
Steven Glick, Director of Mortgage Sales, HomeAbroad
Top Places to Invest in New York with a DSCR Loan
New York offers diverse real estate investment opportunities, from high-demand urban rentals to stable suburban markets. With an average rental yield of 8.47%, the state provides strong potential for cash-flowing properties.
Whether you’re targeting short-term rentals in major metros or long-term income properties in upstate regions, a DSCR loan can help you secure financing without relying on personal income verification. Here are some top cities in New York for real estate investors:
City | Rental Type | Rental Yield |
|---|---|---|
Buffalo | Short Term | 14.1% |
Rochester | Long term | 8% |
New York City | Short term | 7.5% |
Albany | Long term | 6.5% |
Need help finding the right investment property? Our AI-driven investment property search platform can help you discover high-performing rentals in New York or anywhere in the US.
Get a HomeAbroad DSCR Loan in New York
Investing in New York real estate is easier with HomeAbroad’s DSCR loans. Unlike traditional loans that require extensive income documentation, our DSCR loans allow you to qualify based on rental income, making it easier to invest in high-demand markets across the state.
With flexible loan terms, competitive rates, and an AI-powered platform to find high-yield properties, HomeAbroad simplifies the entire investment process. Our experts guide you every step of the way, ensuring fast approvals and seamless financing.
Start growing your real estate portfolio with a HomeAbroad DSCR loan today!
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Frequently Asked Questions
Can I use a DSCR loan in New York for refinancing?
Yes, DSCR loans can be used for refinancing investment properties. As long as the property’s rental income meets the lender’s DSCR requirement, you can refinance to access better terms or pull cash out for new investments. HomeAbroad helps investors secure the best refinancing options tailored to their goals.
How long does it take to get approved for a DSCR loan in New York?
At HomeAbroad, we strive to make the approval process as fast and efficient as possible. Typically, you can expect to receive approval for a DSCR loan within 30 days, depending on the complexity of the loan and the property details.
Are DSCR loans in New York easy to get?
DSCR loans are generally easier to qualify for compared to traditional loans since they focus on the property’s rental income rather than personal income or credit.
At HomeAbroad, we ensure the reliability of our content by relying on primary sources such as government data, industry reports, firsthand accounts from our network of experts, and interviews with specialists. We also incorporate original research from respected publishers when relevant. Discover more about our commitment to delivering precise and impartial information in our editorial policy.
AirDNA: https://www.airdna.co/vacation-rental-data/app/us/california
Zillow: Housing Data – Zillow Research
