DSCR Loans

[Dublin ohio]

Just got an order this morning for a purchase of a single family... DSCR loan, needs a 1007 and rents.
Appears to be very common in NJ.

So they tell you that it is a DSCR loan?

 

[Non Sequitur]

So they tell you that it is a DSCR loan?

The emails I get state: Loan Type - DSCR.

 

[Tom D]

Never seen that in my urban areas, and i do a lot of 1004 with a 1007. Maybe not telling me. Why the high bad values. They haven't weeded out their bad clients, well now they get weeded out. But bad clients still working. However, the dopes deserve it. Never have gotten a rental rov.

 

[ZZGAMAZZ]

I'm in New Jersey and I don't know if this is as much of a problem outside NJ And NY but these loans are getting a lot of appraisers in hot water.

This is the definition of DSCR Loans:

The debt service coverage ratio, also known as the debt coverage ratio, is a financial ratio that measures an entity's ability to generate sufficient cash to cover its debt obligations, including interest, principal, and lease payments. It is calculated by dividing the net operating income by the total debt service.




I've heard from management at two different AMCs that Fannie Mae is hitting them with lists of hundreds of appraisers that they can't use anymore mainly because of flagged reports for DSCR loans.

If you do take on these assignments as appraisers, STICK TO YOUR GUNS regarding your estimated market rents. I can't tell you how many times I've gotten reconsiderations of market rent, the subject is a two family in Newark NJ that hasn't been updated in 50 years and the rents they send in their reconsideration are brand new construction, single family homes, completely renovated... and they are basically telling you "we need these numbers for the loans to work." I guess too many appraisers are eager to help because a lot are getting blacklisted by Fannie Mae.

Has anyone else had issues with these loans?

Would the intended use of an assignment typically be described as a DSCR in the engagement?