DSCR Loans Indiana is the name of our private lending team serving rental property investors in The Hoosier State. DSCR loans are popular among Indiana rental property investors because they do not require income verification or tax returns and are therefore faster than conventional loans and bank loans.
Whether you're acquiring or refinancing rental properties, DSCR loans are an excellent financing option and we're glad you're taking the time to learn more about this loan type. If you're looking for the best DSCR loan Indiana has to offer, you've come to the right place! Getting a DSCR loan for your Indiana rental property does not have to be time consuming or stressful. Get the lowest rate, highest leverage, lowest fees, and fastest processing every time from OfferMarket.
DSCR loans, also known as "rental loans", are typically 30 year fixed rate mortgages where the loan amount is based on the cash flow of your rental property. DSCR stands for Debt Service Coverage Ratio, a simple cash flow metric that indicates whether the rental property can generate enough income to safely cover monthly mortgage payments. In order to determine the maximum loan your rental property qualifies for, we recommend using a DSCR calculator.
Understanding the inputs used to calculate DSCR, and how they ultimately determine your loan amount, will sharpen your ability to identify great investment opportunities and help you avoid deals with low cash on cash returns.
|DSCR at Desired LTV|
|Cash Flow Negative||Less than 1.0|
|Cash Flow Breakeven||1.0|
|Cash Flow Positive||Greater than 1.0|
|Ideal||Greater than 1.2|
You have many options when it comes to choosing a DSCR lender for your Indiana rental property.
OfferMarket was founded by fellow rental property investors who decided that a better DSCR loan program should exist. Our mission is to help you build wealth through real estate. We do this by eliminating unnecessary costs and providing you with the best possible terms every single time you get a DSCR loan from us.
📉 Lower interest rates
💸 Lower origination fee
💰 Higher LTV
🛎️ Better service
👨💻 Better technology
⚡ Faster time to close
📅 No seasoning
Here's a breakdown how OfferMarket compares to other DSCR lenders:
|OfferMarket||Other DSCR Lenders|
|Interest Rate||Get Instant Quote||Get Instant Quote|
|LTV Rate and Term Refi||80%||75%|
|LTV Cash Out Refi||75%||70%|
|Minimum Credit Score||660||680|
|Appraisal||Direct (save $250)||AMC (waste $250)|
|Origination Fee||1%||2% to 3%|
|Time To Close||15 - 25 Days||30 - 60 Days|
|Processing||Online, Fast||Manual, Slow|
In Indiana, as in other states, DSCR loans are completely different than conventional loans for investment properties. Conventional loans are often referred to as "full doc" loans because they need to conform with strict underwriting guidelines of Fannie Mae and Freddie Mac. If you don't have a W2, you will have a difficult time qualifying for a conventional loan. Interest rates for conventional loans are slightly lower than the most competitive DSCR loans, but not necessarily by enough to justify going the conventional route.
|DSCR Loan||Conventional Loan|
|Interest Rate||see index (DSCR)||see index (Conventional)|
|Origination Fee||1% - 2%||1%|
|Term||30 Years||30 Years|
|Time to close||20 - 30 Days||30 - 45 Days|
We speak with rental investors on a daily basis who have tried working with banks with little to no success. Many banks will not lend for properties that are 1 to 4 units as they tend to prefer multifamily properties that are 5 or more units. Banks are notoriously risk averse, while DSCR loans follow standard guidelines and are sold after origination and pooled into mortgage-backed securities.
|DSCR Loan||Bank Loan|
|Interest Rate||see index (DSCR)||see index (Prime)|
|Origination Fee||1% - 2%||0.5% - 1%|
|Term||30 Years||15 - 25 Years|
|Time to close||20 - 30 Days||30 - 60 Days|
Indiana private lenders do not need to have an NMLS license to originate DSCR loans because these are business purpose loans.
We are actively funding rental property purchases and cash out refis throughout Indiana. As a rule of thumb, you can get a DSCR loan anywhere in Indiana that isn't objectively rural.
If you're a new investor or an experienced investor looking for local market insights, our friendly and knowledgeable relationship managers are always happy to share our unique insights and walk you through our simple process.
It's difficult to get a DSCR loan in rural Indiana because the loan is typically sold to investors with strict guidelines that do not allow rural properties. The reason is because rural properties are less liquid and usually have less tenant demand. As such, investors do not want to hold a loan on a property that may take a long time to sell or rent.
|Fort Wayne||262,000||Allen County|
|South Bend||102,000||St. Joseph County|
|Terre Haute||58,500||Vigo County|
|Mishawaka||50,000||St. Joseph County|
Indianapolis is an excellent market to invest in rental properties for cash flow and price appreciation.
|South Franklin||46112, 46074, 46168, 46037|
|Far East Side||46201|
|Downtown||46202, 46203, 46204, 46225|
|Keystone at the Crossing||46240|
If you have 2 or more rental properties in Indiana, you can include them all in one loan -- this is called a "portfolio loan". Portfolio loans can be used when acquiring a portfolio from a single seller, or when refinancing multiple rental properties you already own.
|Portfolio DSCR Loan|
|Number of Properties||2 or more|
|Interest Rate||Get Instant Quote|
|Max LTV -- Purchase||80%|
|Max LTV -- Rate and Term Refi||80%|
|Max LTV -- Cash Out Refi||75%|
|Max LTC -- Delayed Financing||80%|
|Min Credit Score||660|
|Min Loan Amount Per Property||$50,000|
|Min As Is Value Per Property||$62,500|
The max LTV for a cash out refi DSCR loan in Indiana is 75%. While most DSCR lenders in Indiana require 6 months of seasoning, you can cash out refi with no seasoning. We just need to verify that you have added value to the property and you have a lease and security deposit in place. This is perfect for BRRR investors who want to quickly recycle cash to do more deals. You should not be penalized for rehabbing and leasing your rental property efficiently. We are a Indiana private lender specialized in DSCR loans for rental property investors that use the BRRR method.
In Indiana, DSCR loans are most commonly originated by lenders that identify as "private lenders". Private lenders are non-bank lenders who typically sell your DSCR loan to institutional capital providers and credit investors (think Wall Street). Most Indiana DSCR loans ultimately end up as part of a mortgage backed security that is sold to fixed income investors including pension funds, credit funds, and insurance companies. This is done through a process known as "securitization". You don't need to worry about this, it's helpful to understand how the DSCR loan industry works.
Technically, private lenders and hard money lenders in Indiana are the same. While lenders that identify as "hard money lenders" commonly originate DSCR loans, they tend to focus more on fix and flip loans.
As in other states, the appraisal for your DSCR loan in Indiana will require the following form based on the type of property. Depending on your DSCR lender, your appraisal will either be ordered through an appraisal management company (AMC), or directly with an appraisal that is approved by your lender. At OfferMarket, we use both methods and allow our clients to request a preferred appraiser.
Using our Appraisal Price and Availability Request, we collect competitive bids from appraisers in our network and route our appraisal order directly to the most competitive appraiser. This typically saves you $250 by avoiding an AMC and results in faster turnaround time. If you have a time sensitive purchase or refi using a DSCR loan, this appraisal ordering process saves you time and money.
|Property Type||Appraisal Form|
|Single Family (SFR)||1004 with 1007|
|5+ Unit||Full Commercial Narrative Appraisal|
Requirements for DSCR loans in Indiana are generally the same as other states.
|Indiana DSCR Loan Requirements|
|DSCR||1.1 and higher|
|Property Condition Rating||C2, C3, C4|
|Credit Score||660 and higher|
|Background Check||No Felonies|
|Liquidity -- Purchase||Enough to cover down payment, closing costs, 9 months of mortgage payments|
|Liquidity -- Refi||Enough to cover 9 months of mortgage payments|
|Bankruptcy||Not within the last 7 years|
If you have a time sensitive transaction in Indiana, we would love to be your DSCR lender. Get an instant quote and pre-approval today!