The Honest Answer
Bad credit limits your options, but doesn't eliminate them. Below 660 FICO, standard and expanded DSCR programs are unavailable. Program 7 provides a real path for 500+ FICO borrowers on long-term rental (LTR) 1–4 unit properties. Higher rates apply, but access to equity is real.
Credit Tier Breakdown
What “Higher Rates” Actually Means
Program 7 rates are in the 9s. If current standard DSCR rates are in the 7s, you're looking at approximately 2 percentage points higher. On a $100,000 loan, that's roughly $200/month in additional interest. On a $200,000 loan, approximately $400/month.
Whether that trade-off makes sense depends on your situation. If you're sitting on $100,000 in equity and need it for a deal that returns 20%, a 9% loan rate is still a good trade. If you're refinancing purely to improve monthly cash flow, the math may not work at Program 7 rates. Run the numbers before committing.
How to Improve Your Credit Before Refinancing
- Pull your credit report and dispute any errors (inaccurate items can improve score in 30–60 days)
- Pay revolving balances below 30% utilization: fastest positive impact on FICO
- Avoid new credit applications for 60–90 days before applying
- Request a goodwill adjustment from lenders on any late payments
- Become an authorized user on a low-utilization, long-history account
Below 660 FICO?
Submit your deal: we'll tell you exactly what's available. No credit pull.
Submit Deal Summary →The 500 FICO Path
500 FICO is the practical floor for Program 7. Below 500 typically indicates a recent bankruptcy or severe delinquency that makes even higher-rate private lending difficult. If you are between 500 and 580 FICO, submit your deal: the scenario assessment is free and we will tell you directly what's available. Every deal is different.
The Bottom Line
Bad credit is a rate and LTV problem, not a complete roadblock: not above 500 FICO. Every investor with meaningful equity in an LTR property and 500+ FICO has at least one path through Program 7. The honest trade-off is higher cost of capital in exchange for access to that equity today.