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DSCR Loan Indiana

Last updated: April 16, 2024

DSCR Loan Indiana - Cover Photo

Today's DSCR loan interest rates for loans funded by OfferMarket are in the 7.5% to 8.25% range depending on LTV, property type and prepayment penalty. We have extensive experience serving rental property investors in The Hoosier State -- in fact it's our fastest growing market -- and we would love the opportunity to be your DSCR lender!

Indiana DSCR loan interest rates

Source: DSCR Loan Interest Rates Index

Thankfully, in many Indiana markets, rents relative to As Is value supports strong DSCR and max LTV. There are still many rental property investors, especially in greater Indianapolis, facing challenges structuring their DSCR loan to meet loan amount and cash flow targets. By having access to the most competitive interest rate, lowest fees and reliable capital source, you can confidently navigate this challenging market and continue to grow and optimize your rental property portfolio.

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 Loan Calculator

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

DSCR Lender Indiana

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
ğŸ›Žï¸ 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 Purchase 80% 75%
LTV Rate and Term Refi 80% 75%
LTV Cash Out Refi 75% 70%
Minimum DSCR 1.0 1.2
Minimum Credit Score 660 680
Borrower Experience 0+ 1+
Appraisal Free* $640 - $750
Seasoning No or 90 days 6 Months
Origination Fee 1% 2% to 3%
Junk Fees None Tons
Time To Close 15 - 25 Days 30 - 60 Days
Quoting Instant Slow
Pre-Approval Letter Instant Slow
Processing Online, Fast Manual, Slow

DSCR Loan vs Conventional Loan

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
Investor Friendly Yes No
Tax Returns No No
W2 No Yes

DSCR Loan vs Bank Loan

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
Investor Friendly Yes No
Tax Returns No No
W2 No No

Do DSCR lenders need a license in Indiana?

Indiana private lenders do not need to have an NMLS license to originate DSCR loans because these are business purpose loans.

Where can you get a Indiana DSCR Loan?

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.

Rural DSCR Loan Indiana

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.

Best markets in Indiana for rental investors

City Population County
Indianapolis 890,000 Marion County
Fort Wayne 262,000 Allen County
Evansville 117,000 Vanderburgh County
South Bend 102,000 St. Joseph County
Carmel 98,000 Hamilton County
Fishers 97,000 Hamilton County
Bloomington 80,000 Monroe County
Hammond 77,500 Lake County
Lafayette 71,000 Tippecanoe County
Gary 70,000 Lake County
Noblesville 69,000 Hamilton County
Muncie 65,000 Delaware County
Greenwood 62,000 Johnson County
Kokomo 59,000 Howard County
Terre Haute 58,500 Vigo County
Anderson 55,000 Madison County
Mishawaka 50,000 St. Joseph County
Columbus 50,000 Bartholomew County
Jeffersonville 49,000 Clark County
Lawrence 49,000 Marion County

DSCR Loan Indianapolis

Indianapolis is an excellent market to invest in rental properties for cash flow and price appreciation.

Best neighborhoods for DSCR loans in Indianapolis

Neighborhood ZIP
Near Eastside 46201
Near Northside 46202
Broad Ripple 46220
South Franklin 46112, 46074, 46168, 46037
Far East Side 46201
Downtown 46202, 46203, 46204, 46225
Canterbury-Chatard 46205, 46220
Castleton 46250, 46256
Keystone at the Crossing 46240
Ravenswood 46240

Portfolio DSCR Loan Indiana

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 DSCR 1.1
Min Credit Score 660
Min Loan Amount Per Property $50,000
Min As Is Value Per Property $62,500
Personal Guarantee No

Cash Out Refi DSCR Loan

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.

Indiana Private Lender

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.

Hard Money Lenders In Indiana

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.

Appraisal for Indiana DSCR 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
Duplex (2-Unit) 1025
Triplex (3-Unit) 1025
Quadplex (4-Unit) 1025
5+ Unit Full Commercial Narrative Appraisal
Condo 1073

DSCR Loan Indiana Requirements

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!