Rent Is Belowthe New Payment.There Are Two Different DSCR Paths., DSCR Cash-Out Refinance for a Property Below 1.0 DSCR
- A standard qualifying option can go down to 0.75 DSCR
- Program 7 is separate and has no minimum DSCR ratio requirement
- Program 7 qualifying refinances can reach up to 60% LTV
- Program 7 qualifying loan amounts can reach up to $10 million
A sub-1.0 DSCR file can have more than one path. The 0.75 standard option and Program 7 are separate programs with different leverage and pricing.
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The Important Distinction
0.75 DSCR and No Minimum DSCR Are Different Options
A DSCR below 1.0 means the qualifying rental income is lower than the full monthly housing payment used in the ratio. That does not automatically make the property ineligible.
One standard qualifying option can go down to 0.75 DSCR. That flexibility generally adds about 1.00% to 1.25% to the standard rate.
Program 7 is a separate higher-rate option with no minimum DSCR ratio requirement. Qualifying Program 7 refinances can reach up to 60% LTV and qualifying loan amounts can reach up to $10 million.
Compare the Two Low-DSCR Paths
Standard Low-DSCR Option
Down to 0.75 DSCR
Generally adds about 1.00% to 1.25% to the standard rate. Final leverage and other rules depend on the selected program.
Program 7
No Minimum DSCR Ratio
Qualifying refinances can reach up to 60% LTV. Program 7 can also consider low FICO or no traditional FICO score, with materially higher pricing than standard-credit programs.
What We Still Need to Match on a Low-DSCR File
Below 1.0 DSCR Cash-Out FAQ
DSCR Below 1.0? Compare Both Paths.
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