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DSCR Loan Virginia

Looking for a DSCR loan for your Virginia rental property? Welcome, you've come to the right place! Wherever you are in your real estate investing journey, we are here to help you.

We know you may be in a hurry, but please take a moment to get an instant quote, and take advantage of our insights and resources to help ensure your next DSCR loan is a success:

Being headquartered in Maryland, we are very familiar with the Virginia rental property market. In our view, Virginia is positioned as a compelling market for long term home price and rent appreciation. We're fortunate to serve a growing number of wonderful clients in the state and we certainly hope to have the opportunity to be of service to you!

Here are frequently asked questions from our Virginia clients:

What is a DSCR loan?

A DSCR loan is simply a mortgage specifically for a rental property where the maximum loan amount is determined by the DSCR (Debt Service Coverage Ratio) of the property. DSCR is Rental Income divided by Monthly Mortgage Payment. As your loan amount increases, your monthly mortgage payment increases, and your DSCR decreases. 1.1 is currently the minimum DSCR to qualify for a given loan amount. Use our DSCR Calculator to help you run your numbers, understand DSCR, max loan amount, monthly cash flow, cash to close and cash out for your next deal.

Can I cash out refi with no seasoning?

Yes! OfferMarket is one of the only private lenders with a cash out refi no seasoning program. Instead of waiting for 6 months to refinance your rental property, you can refi as soon as your renovation is completed and the property is leased. Why should you have to wait to pull cash out of a property and reinvest it into growing your business?

Do I qualify for a DSCR loan?

Borrowing Entity: Because our loans are business purpose, we only fund loans to business entities. If title is currently held in your personal name, you would need to transfer it into an LLC or corporation before we can fund.

Credit Score: the minimum credit score is 660. If you have more than one borrower in your borrowing entity, the ownership of each member will determine which credit score we use. If you do not want to use one of the member's credit score, they will need to own less than 50% of the borrowing entity. We use a tri merge credit report, which is a hard credit pull that collects your credit report from Experian, Equifax and Transunion, and we take the middle score. So, if your tri merge report is 721, 697, 738, then we will use 721 to determine your loan terms.

Background Check: if you have a clean background report, then you're all set. If you have one or more bankruptcy, felony or misdemeanor on your background report, then we will need you to provide a letter of explanation to determine if you are eligible for funding.

Non-Rural: if your property is designated as rural or the appraiser indicates that your property is rural on their appraisal report, then we may not be able to fund your loan. DSCR loans are meant for properties in highly liquid markets where you can quickly sell the property for market price if need be.

Minimum As Is Value: currently, we require your property to appraise for at least $100,000, and we require your loan amount to be at least $75,000.

What is the maximum DSCR loan amount?

Purchase: we can fund up to 80% of the purchase price as long as the property does not appraise for below the purchase price, and the appraisal market rent supports that loan amount.

Rate and term refinance: if you have an existing loan on the property, we can refinance up to 80% LTV as long as you do not receive more than 2% of the loan amount as a cash out at settlement.

Cash out refinance: we can fund up to 75% LTV.

If you're looking for more higher leverage than the above terms (i.e. higher LTV, lower down payment), we urge you to use caution because legitimate DSCR lenders will rarely offer more leverage than what is offered by OfferMarket.

How long does it take to get a DSCR loan?

Our target for every DSCR loan is to fund in 20 to 25 days. Here are the most common reasons why funding can be delayed:

Appraisal delay: 3rd party appraisers provide a report due date but may miss that deadline. The appraiser's report may need to be revised and the appraiser may be delayed in providing their revised report.

Title work delay: title companies and closing attorneys may take more time to complete the title work, especially if they are waiting on a lien certificate from a the county or title is clouded.

Borrower delay: in your OfferMarket Loan File, we provide you with a checklist of items that we need in order for your file to be ready for final review and loan approval. Our processing team will follow up to remind you when there are items that we need you to take care of, and if you do not take action on these items in a timely manner, then your loan will be delayed.

Best cities to buy rental properties in Virginia

We see considerable distortion in the Virginia rental market due to proximity to Washington DC. In the DC metro area and surrounding suburbs, home price increases and limited inventory have discouraged 1 to 4 unit rental investment. The best value for rental property investors in Virginia may well be in smaller markets removed from DC, such as those home to the largest universities in the state.

University City County Population Population Growth Median Home Price Market Rent Crime Score School Rating
University of Virginia Charlottesville Albemarle 21,000 0.4% $450,000 $1,800 1,900 9/10
Virginia Tech Blacksburg Montgomery 32,000 0.6% $300,000 $1,200 2,500 8/10
George Mason University Fairfax Fairfax 38,628 3.4% $400,000 $1,600 2,000 7/10
Virginia Commonwealth University Richmond Richmond 31,741 0.5% $350,000 $1,400 2,200 7/10
James Madison University Harrisonburg Rockingham 22,000 0.4% $275,000 $1,100 1,800 7/10
Old Dominion University Norfolk Norfolk 25,000 0.6% $325,000 $1,300 2,300 7/10
Christopher Newport University Newport News Newport News 15,000 0.5% $250,000 $1,000 1,500 6/10
Norfolk State University Norfolk Norfolk 14,000 0.4% $225,000 $900 1,300 5/10
Radford University Radford Radford 13,000 0.3% $250,000 $1,000 1,500 6/10
Virginia State University Petersburg Dinwiddie 9,000 0.2% $200,000 $800 1,200 4/10

Virginia Rental Markets

Rank City County Population Population Growth Rate Median Household Income Median Home Price Market Rent % Renters Crime Rate School Rating
1 Virginia Beach Virginia Beach 457,672 1.2% $95,692 $360,000 $1,500 35% 1,240 per 100,000 8/10
2 Chesapeake Chesapeake 251,269 0.9% $85,456 $300,000 $1,200 30% 1,080 per 100,000 7/10
3 Norfolk Norfolk 235,089 0.8% $78,544 $275,000 $1,100 25% 1,000 per 100,000 6/10
4 Richmond Richmond 226,604 0.7% $82,345 $290,000 $1,150 28% 1,050 per 100,000 7/10
5 Newport News Newport News 185,069 0.6% $80,234 $280,000 $1,100 27% 1,020 per 100,000 6/10
6 Alexandria Alexandria 158,185 0.5% $100,723 $400,000 $1,600 35% 1,300 per 100,000 9/10
7 Hampton Hampton 136,748 0.4% $75,123 $260,000 $1,050 25% 970 per 100,000 6/10
8 Roanoke Roanoke 99,578 0.3% $70,812 $250,000 $1,000 23% 900 per 100,000 5/10
9 Portsmouth Portsmouth 97,454 0.2% $68,901 $240,000 $950 22% 850 per 100,000 5/10
10 Suffolk Suffolk 93,268 0.2% $72,690 $250,000 $1,000 24% 920 per 100,000 5/10
11 Lynchburg Lynchburg 78,973 0.3% $74,356 $260,000 $1,050 26% 950 per 100,000 6/10
12 Dale City Prince William 73,716 0.1% $71,123 $250,000 $1,000 25% 900 per 100,000 6/10
13 Centreville Fairfax 73,064 0.1% $78,901 $275,000 $1,100 27% 1,000 per 100,000 7/10
14 Reston Fairfax 62,453 0.2% $104,723 $425,000 $1,800 40% 1,500 per 100,000 9/10
15 Harrisonburg Rockingham 52,062 0.2% $72,812 $250,000 $1,000 24% 850 per 100,000 6/10
16 McLean Fairfax 49,310 0.1% $135,723 $600,000 $2,400 50% 2,000 per 100,000 10/10
17 Leesburg Loudoun 48,223 0.2% $90,812 $325,000 $1,300 30% 1,100 per 100,000 7/10
18 Tuckahoe Henrico 48,187 0.1% $87,812 $300,000 $1,200 28% 1,000 per 100,000 7/10
19 Charlottesville Albemarle 46,597 0.3% $97,812 $350,000 $1,400 32% 1,200 per 100,000 8/10
20 Ashburn Loudoun 44,950 0.3% $112,812 $475,000 $1,900 45% 1,700 per 100,000 10/10
21 Lake Ridge Prince William 44,697 0.2% $92,812 $325,000 $1,300 30% 1,100 per 100,000 7/10
22 Blacksburg Montgomery 44,385 0.4% $76,812 $275,000 $1,100 27% 950 per 100,000 6/10
23 Burke Fairfax 44,191 0.2% $89,812 $310,000 $1,250 29% 1,050 per 100,000 7/10
24 Woodbridge Prince William 42,734 0.3% $85,812 $300,000 $1,200 28% 1,000 per 100,000 7/10
25 Manassas Prince William 42,596 0.3% $84,812 $290,000 $1,150 27% 975 per 100,000 7/10

Virginia Rental Market Insights

Market Rent vs Home Prices: Given the rapid rise in home values in NOVA, it's not uncommon to see market rent lag. In a high interest rate environment, this will lead to low DSCR which may cause a slight reduction in max loan-to-value (LTV). That means you may need a higher down payment for purchases, and you may cash out less than the max.

Property Insurance: landlord insurance that meets DSCR lender guidelines will require specific coverages that increase your annual premium. Property insurers are also increasing premiums in response to home price inflation, labor price inflation, material price inflation and and storm risks. OfferMarket Insurance can help you save hundreds per month on your landlord insurance policy.

DSCR Loan Virginia: Let's Get Started

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