DSCR Loan Minnesota
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Minnesota is uniquely positioned for durable, long term economic growth, and we believe the state's strong fundamentals make it an excellent place to own single family (1 - 4 unit) rental properties.
If you're looking for the best DSCR loan Minnesota has to offer, you've come to the right place. Our mission is to help you build wealth through real estate, and we do that by providing the most competitive rental loans possible -- our version of everyday low pricing.
While we cannot control DSCR loan interest rates, we can always provide you with the lowest possible rate and fees every single time you request an instant DSCR loan quote. As an informed borrower, you can make the best decisions to successfully grow your rental portfolio. Extreme transparency, ongoing market insights, free tools (i.e. DSCR calculator) and a dedicated relationship manager are all in place to assist you on your rental property investing journey.
DSCR Lender Minnesota
With rising home prices and elevated interest rates, finding the most cost effective lender to protect your profit and eliminate unnecessary cost from your next purchase or refi is critical. The truth is that most lenders that specialize in DSCR loans are charging elevated fees to offset their increasing costs and lower transaction volume. Many are forced to do this in order to stay in business. Understanding the fees lenders charge will allow you to avoid excessive fees that cut into your cash on cash return and compromise the viability of your transaction.
DSCR Loan Fees
| Fee type | Expected range |
|---|---|
| Interest Rate | Get instant quote |
| Origination fee | 1% to 2% of loan amount |
| Underwriting fee | $0 to $995 |
| Legal/Doc Prep fee | $500 to $995 |
| Appraisal | Market rate |
Is Minnesota a good place to own rental properties?
At OfferMarket, we firmly believe that the economic development and trajectory of a given city and state is a critical consideration when buying your next rental property. We view Minnesota as an undervalued market for rental property investment with a stable, positive long term outlook.
Minnesota housing market
| Year | Median Home Price | Market Rent |
|---|---|---|
| 2013 | $215,000 | $1,300 |
| 2014 | $225,000 | $1,350 |
| 2015 | $235,000 | $1,400 |
| 2016 | $245,000 | $1,450 |
| 2017 | $255,000 | $1,500 |
| 2018 | $265,000 | $1,550 |
| 2019 | $275,000 | $1,600 |
| 2020 | $285,000 | $1,650 |
| 2021 | $295,000 | $1,700 |
| 2022 | $305,000 | $1,750 |
Minnesota Economic Overview
Minnesota has a large and growing economy. Here's an overview showcasing the unique appeal of Minnesota:
- Gross Domestic Product (GDP): $349.5 billion (26th out of 50)
- Economic diversification: agriculture, healthcare, technology, consumer
- Unemployment rate: 2.3% vs. 3.6% national average
- Median household income: $73,559 (6.5% growth rate, 10th in the United States)
- Workforce education: 37% of people have a college degree or higher vs. 33% national average
- Quality of life: 2nd out of 50
Largest employers in Minnesota
| Rank | Company | Employees | City |
|---|---|---|---|
| 1 | UnitedHealth Group | 340,000 | Minneapolis |
| 2 | 3M | 90,000 | St. Paul |
| 3 | Target | 350,000 | Minneapolis |
| 4 | Best Buy | 125,000 | Minneapolis |
| 5 | Ecolab | 27,000 | Saint Paul |
| 6 | Ameriprise Financial | 20,000 | Minneapolis |
| 7 | Pentair | 15,000 | Edina |
| 8 | U.S. Bancorp | 70,000 | Minneapolis |
| 9 | Thrivent Financial for Lutherans | 25,000 | Minneapolis |
Best places to own rental properties in Minnesota
| Rank | City | Population | County | Property Tax Rate |
|---|---|---|---|---|
| 1 | Minneapolis | 425,096 | Hennepin | 1.22% |
| 2 | Saint Paul | 303,176 | Ramsey | 1.31% |
| 3 | Rochester | 121,878 | Olmsted | 1.44% |
| 4 | Bloomington | 87,797 | Hennepin | 1.18% |
| 5 | Duluth | 86,619 | Saint Louis | 1.27% |
| 6 | Brooklyn Park | 83,324 | Hennepin | 1.21% |
| 7 | Plymouth | 78,683 | Hennepin | 1.20% |
| 8 | Woodbury | 78,561 | Dakota | 1.16% |
| 9 | Lakeville | 74,553 | Dakota | 1.15% |
| 10 | Blaine | 71,739 | Ramsey | 1.29% |
Safest neighborhoods in Minneapolis
- Downtown
- North Loop
- Waite Park
- St. Anthony Park
- Linden Hills
Dangerous neighborhoods in Minneapolis
- South Minneapolis
- Hawthorne
- Phillips
For more insights on safety, check out the Minneapolis Crime Dashboard
Best suburbs of Minneapolis
- Edina: affluent, known for its excellent schools, safe neighborhoods, and proximity to Minneapolis. It is home to many parks, shopping centers, and restaurants. 10 minute drive to Downtown Minneapolis.
- Minnetonka: affluent suburb, close knit community. 16 minute drive to Downtown Minneapolis.
- Shoreview:
- Hopkins
- Wayzata
How to get a DSCR loan
Getting a DSCR loan for your Minnesota investment property is easy. Get your instant quote in under a minute and process your loan online.
Why OfferMarket Is Best For DSCR Loans
Loan Amounts & LTV/LTC Matrix
| Credit Score | Purchase LTV | Refinance (Rate/Term) | Refinance (Cash-Out) |
|---|---|---|---|
| 700+ | 80% | 80% | 75% |
| 680–699 | 75% | 75% | 70% |
| Foreign National | 65% | 65% | 60% |
Additional Notes:
Foreign Nationals: +5% LTV allowable if DSCR > 1.30 and 12 months liquidity provided.
Airbnb/VRBO: Properties have LTV reduced by 5%.
Loan Amount: Minimum $55,000 – Maximum $3M (higher amounts considered case-by-case).
DSCR Requirements
| Requirement | Details |
|---|---|
| Minimum DSCR | 1.00 (Lower DSCR allowed with stricter terms: reduced LTV, higher credit score, higher reserves, investment experience required). |
| Calculation Method | Monthly Gross Rent ÷ Monthly PITIA (Principal, Interest, Taxes, Insurance, HOA dues) or ITIA (Interest-only). |
| Short-Term Rentals | 80% of cash flow considered; AIRDNA data required (12 months for refinances, all available data for purchases). |
Interest Rates
| Loan Type | Details |
|---|---|
| 30-Year Fixed | Standard fixed-rate or Interest-only available (10-year IO, slightly higher rate). |
| Adjustable Rate (ARM) | 5/6, 7/6, 10/6 ARMs; Index: 12-month SOFR + Margin (4.5%–6%). |
| Rate Caps | Initial & Periodic Reset: 2.00%; Lifetime Cap: 5.00% (10/6 ARM initial cap: 5.00%). |
Prepayment Penalties
| Structure | Details | State Exceptions |
|---|---|---|
| Step-Down | 5-4-3-2-1, 4-year step-down, or fixed % (e.g., 5% for 5 years). | Prohibited: AK, MN, NM. Max 3 years MI, 1% VA, 2% RI, other state-specific caps apply. |
| No Penalty Option | Available with higher interest rate. |
Property & Portfolio Guidelines
Eligible Properties
Property Types: Single-family, 2–4 units, condos (warrantable only), townhomes, PUDs.
Condition Requirements: Lease-ready (Appraisal ratings C1–C4); deferred maintenance ≤3% of property value.
Portfolio Loans
| Feature | Details |
|---|---|
| Minimum Properties | 2 |
| Maximum Properties | 10 standard, up to 25 for specific programs. |
| Maximum Loan Amount | $2M standard, up to $6.25M for expanded programs. |
| Collateral | Cross-collateralization required; 90% occupancy by unit count. |
Costs & Fees
| Fee Type | Cost |
|---|---|
| Origination | $2,000 or 1% of loan amount (whichever is greater). |
| Lender Fee | $1,995 flat. |
| Appraisal | Paid directly to AMC ($400–$1,200+); existing appraisal ≤90–120 days accepted. |
Qualification & Documentation
Borrower & Credit Requirements
| Item | Details |
|---|---|
| Minimum Credit Score | 660 (restrictions apply); 680+ recommended for standard terms and better rates. |
| Down Payment | Minimum 20%; Gift funds allowed after borrower contributes 10%; Seller concession up to 3% subject to lender approval. |
| Business Entity | Preferred: LLCs or Corporations; Other entity types allowed case-by-case; Foreign Nationals allowed per guidelines. |
Required Documentation
| Document Type | Specific Items Required |
|---|---|
| Personal Documents | Credit report, Borrower ID, Spouse/partner ID (if applicable), Primary residence verification. |
| Entity Documents | Articles of Incorporation, Operating Agreement/Bylaws, EIN letter, Certificate of Good Standing. |
| Financial Documents | Bank statements (latest 2 months), Verification of mortgage/payoff (if applicable). |
| Property & Lease Documents | Purchase contract, Appraisal, Insurance, Title docs, HOA docs (if applicable), Lease agreement, Rent/security deposit receipts, Property management agreement (if applicable). |
Appraisal Process
Managed via qualified AMC; Borrower pays AMC directly.
Inspection and appraisal completed typically within 2 days after inspection.
Dispute option available if borrower disagrees with appraisal valuation.
Application & Processing
| Step | Details |
|---|---|
| Loan Application | Fully online portal with pre-approval letters (no mandatory hard credit pull). |
| Conditional Approval | Typically within 15 days from application. |
| Document Submission | Secure online portal or email; real-time tracking of status and feedback on documents. Most documents e-signable; some require physical/notarized signatures. |
Underwriting & Closing
| Process | Details |
|---|---|
| Underwriting Timeline | In-house underwriting; typically completed within 5–8 days once all docs received. |
| Loan Estimate | Provided quickly via portal (usually within 1 day post-submission); DSCR loans exempt from TRID rules. |
| Communication | Dedicated Relationship Manager; proactive updates provided daily; responses within same or next business day. |
Loan Tracking & Closing
| Feature | Details |
|---|---|
| Tracking System | Real-time dashboard/calendar showing loan status and expected closing dates; automated milestone updates provided. |
| Closing Timeline | Typically 20–25 days; expedited closing available without additional fees via rush appraisal. |
| Closing Procedure | Clients sign in person with notary; mobile notary service available. Clients encouraged to choose preferred title/escrow company. |
| Funding | Same-day funding upon review of signed documents; no rescission period. |
Additional Features
| Feature | Details |
|---|---|
| Flexibility for Unique Scenarios | Portfolio loans, interest-only options, ARMs, vacant properties, and foreign national financing supported. |
| Rate Lock | Rate lock occurs upon loan approval or 3 days before closing, whichever is later. |
| Investor-Friendly Policies | Supports BRRRR, fix & flip, slow-flip strategies; investor-focused loan structuring. |
| Transparency on Declines | Detailed reasons provided in rare cases of declines. |
| Market Insights | Access to marketplace: latest listings, alerts, tour requests, and direct offers; relationship managers provide ongoing investment support. |
Key Takeaways for Lenders
✅ Max LTV: Up to 80% for purchases (dependent on credit score).
✅ Competitive Rates: ARM and fixed options tailored to investor needs.
✅ Efficient Process: User-friendly online portal, real-time tracking, and proactive communication ensures fast, smooth closings.
