DSCR Loan georgia

Pros of Georgia DSCR Loans
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No Personal Income Verification – Approval is based on rental income, making it ideal for self-employed investors or those with complex finances.
‍Easier Qualification – No tax returns or W-2s required; approval is based on the property's DSCR.
‍Flexible Property Types – Can be used for single-family rentals, multifamily units, condos, and short-term rentals like Airbnb.
‍Scalable Financing – Investors can qualify for multiple properties without debt-to-income (DTI) limitations.
‍Interest-Only Payment Options – Some lenders offer interest-only loans, lowering monthly payments and increasing cash flow.
‍Cash-Out Refinancing Available – Allows investors to tap into equity to fund new investments.

Cons of Georgia DSCR Loans

Higher Interest Rates – Typically 1-1.5% higher than conventional mortgages due to the risk-based pricing.
‍Higher Down Payment – Requires 20-25% down, while conventional loans may allow as low as 15% for investment properties.
‍Prepayment Penalties – Many DSCR loans include penalties if paid off early, especially within the first 3-5 years.
‍LTV Restrictions on Cash-Out Refinances – Maximum 70-75% LTV for cash-out refinances, limiting access to equity.
‍Strict Property Income Requirements – Some lenders require a minimum DSCR of 1.0 – 1.25, which may limit financing for underperforming properties.

Despite these drawbacks, DSCR loans remain the top choice for real estate investors in Georgia looking for flexible, scalable financing.

• Increase Your Down Payment. By Increasing your down payment your loan amount will go down and your DSCR will increase. If you’re struggling to improve your DSCR past 1.0, increasing your down payment is an option you may have to consider.
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• Ask Your Lender About A Rate Buy Down. Some lenders, including Ridge Street, allow you to pay an additional fee at closing in exchange for a lower rate. In some cases, a rate buydown will allow you lower your DSCR without increasing your overall cash required to close.
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• Push For Less Expensive Insurance. Ask your insurance broker if there is anything they can do to lower your policy fee. A lower insurance policy fee will increase your DSCR.

You can start by getting a short term fix and flip loan to renovate the property and then refinance the property with a DSCR loan. The strategy of buy, rehab, rent, refinance, and repeating is called the BRRRR Strategy. You can use this BRRRR Calculator to evaluate BRRRR investment scenarios.

Between $50K and $2.5M. As long as a the DSCR is greater than 1.0, Ridge Street will lend on it.

Yes, the minimum value of collateral that can be financed by a DSCR loan is $75,000.

Yes. If you are buying a piece of real estate which you intend to live in, then you would not qualify for a DSCR loan.

There are number of closing costs associated with a DSCR loans that real estate investors should be aware of:
- Down Payment (20%-25%)
- Loan Origination Fee (1%-2%)
- Appraisal Costs ($650-$1,000)
- Title Fees ($1,500-$2,500)
- Insurance ($1,000-$3,000)

For borrowers with a credit score above 680 the down payment requirements for a DSCR loans is 20%. For borrowers with a credit score between 660-679, the down payment requirement is 25%.

In Georgia, yes an LLC, Corporation, or LLP is required to close a DSCR Loan.

The short answer is no. We understand that investors who fix and refinance properties  intend to refinance as soon as possible after renovating a property. This said, providing a DSCR loan on a rental property that is not rented is higher risk. We'll want to see that the market you are in is very "rentable" at the market rent for your property. We will not provide a DSCR loan on a rental property that has been listed for rent for 3 months with no bites, for example.