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**Last updated:** April 15, 2024

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![DSCR Loan South Carolina - Cover Photo](https://cms.offermarket.us/uploads/DSCR_Loan_South_Carolina_Cover_Photo_bd4401845c.jpg)

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Looking for a DSCR loan for your South Carolina investment property? Welcome and thank you for stopping by! We encourage you to stick around, **[get an instant quote](https://www.offermarket.us/loans)**, and take advantage of our market-leading insights and tools designed to help you build wealth through real estate:

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- [DSCR Loan Interest Rates Index](https://www.offermarket.us/blog/dscr-loan-interest-rates)
- [DSCR Calculator](https://www.offermarket.us/tools/dscr-calculator)

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We fund a lot of DSCR loans in South Carolina and we've built relationships with wonderful clients in the state. We're particularly active in Beaufort, Charleston, North Charleston and Summerville, and we can fund your next purchase or refi anywhere as long as it's not rural. 

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We love working with rental property investors in the Palmetto State, and we sure hope to have the opportunity to work with you.

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## South Carolina DSCR loan interest rates

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<iframe title="DSCR Loan Interest Rates Index (30 year fixed) chart"  width="600" height="371" style="" seamless frameborder="0" scrolling="no" src="https://docs.google.com/spreadsheets/d/e/2PACX-1vRJPw1fYWqj_5mdlNBrD5MLne_ApqpOXlNmkmNE_sZfPgsbn9pU0mWUenEO1x6WE9237S7jzaQE2Hig/pubchart?oid=262687025&amp;format=interactive"></iframe>
</div>

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*Source: [DSCR Loan Interest Rates Index](https://www.offermarket.us/blog/dscr-loan-interest-rates)*

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Here are frequently asked questions from our South Carolina clients:

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## What is a DSCR loan?

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DSCR stands for *debt service coverage ratio*, and it is a simple metric to determine if an investment property generates more or less income than the monthly mortgage payment. A DSCR  loan is simply a mortgage specifically for a rental property where the maximum loan amount is determined by the DSCR of the property. 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](https://www.offermarket.us/tools/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.

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## Can I cash out refi with no seasoning?

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Yes! OfferMarket is one of the only private lenders with a [cash out refi no seasoning](https://www.offermarket.us/blog/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?

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## Do I qualify for a DSCR loan?

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**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.

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**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](https://www.offermarket.us/blog/what-is-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.

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**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.

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**Non-Rural:** if your property is [designated as rural](https://www.offermarket.us/blog/rural-designation-search-tools) 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.

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**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.

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## What is the maximum DSCR loan amount?

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**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.

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**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.

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

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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.

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## How long does it take to get a DSCR loan?

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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:

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**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.

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**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.

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**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.

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## Best cities to buy rental properties in South Carolina

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<div style="display: grid; grid-template-columns: repeat(1, minmax(0, 1fr)); overflow: auto; white-space: nowrap;">
<table>
  <thead>
    <tr>
      <th>Rank</th>
      <th>City</th>
      <th>Population</th>
      <th>Population Growth Rate</th>
      <th>Median Household Income</th>
      <th>Median Home Price</th>
      <th>Market Rent</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td>1</td>
      <td>Charleston</td>
      <td>147,928</td>
      <td>1.3%</td>
      <td>$75,274</td>
      <td>$425,000</td>
      <td>$1,700</td>
    </tr>
    <tr>
      <td>2</td>
      <td>Columbia</td>
      <td>137,276</td>
      <td>0.6%</td>
      <td>$61,791</td>
      <td>$350,000</td>
      <td>$1,400</td>
    </tr>
    <tr>
      <td>3</td>
      <td>North Charleston</td>
      <td>114,542</td>
      <td>1.9%</td>
      <td>$60,422</td>
      <td>$325,000</td>
      <td>$1,300</td>
    </tr>
    <tr>
      <td>4</td>
      <td>Mount Pleasant</td>
      <td>98,900</td>
      <td>2.1%</td>
      <td>$73,167</td>
      <td>$400,000</td>
      <td>$1,600</td>
    </tr>
    <tr>
      <td>5</td>
      <td>Rock Hill</td>
      <td>71,548</td>
      <td>0.9%</td>
      <td>$57,350</td>
      <td>$275,000</td>
      <td>$1,200</td>
    </tr>
    <tr>
      <td>6</td>
      <td>Greenville</td>
      <td>67,086</td>
      <td>1.2%</td>
      <td>$74,975</td>
      <td>$375,000</td>
      <td>$1,500</td>
    </tr>
    <tr>
      <td>7</td>
      <td>Summerville</td>
      <td>48,331</td>
      <td>1.6%</td>
      <td>$67,900</td>
      <td>$300,000</td>
      <td>$1,250</td>
    </tr>
    <tr>
      <td>8</td>
      <td>Goose Creek</td>
      <td>44,464</td>
      <td>1.8%</td>
      <td>$65,500</td>
      <td>$250,000</td>
      <td>$1,100</td>
    </tr>
    <tr>
      <td>9</td>
      <td>Spartanburg</td>
      <td>39,619</td>
      <td>1.1%</td>
      <td>$55,150</td>
      <td>$225,000</td>
      <td>$1,000</td>
    </tr>
  </tbody>
</table>
</div>

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## How do I get started with a DSCR Loan?

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⚡ **[get your instant DSCR loan quote](https://www.offermarket.us/loans) and pre-approval** -- takes less than a minute, be sure to submit so we can confirm the best possible terms (our instant quote is conservative and we commonly can actually provide a lower rate and higher loan amount)

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📄 **upload your purchase agreement or lease** into your OfferMarket Loan File

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🧑‍💻 **schedule your relationship manager call** from your Loan File -- speak with your dedicated relationship manager who will address your questions and concerns and make sure we are a good fit to be your lender.

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DSCR Loan South Carolina, everything rental property investors need to know to get the best possible terms for your next purchase or refi.

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DSCR Loan South Carolina

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**Last edited:** May 1, 2024

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## What is a Prepayment Penalty?

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If you are a rental property investor shopping for a [DSCR loan](https://www.offermarket.us/blog/dscr-loan), you have probably come across the concept of a prepayment penalty. A pre payment penalty is a fee charged to the borrower for paying off the loan during a specified period of time. 

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## Why do lenders charge a prepayment penalty?

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Private lenders charge a pre-payment penalty to avoid a scenario where a loan is originated and then quickly paid off through a refinance or sale. In exchange for a competitive interest rate, the lender is looking to secure a longer duration of interest payments. 

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Let's take a moment to review common pre-payment penalty options and share insights to help you choose the best option for your next financing. 

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## Do lenders charge a prepayment penalty for fix and flip loans?

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You should not be charged a prepayment penalty for short term interest only loans (i.e. fix and flip, bridge, construction, hard money). Some lenders charge a 1% fee on the back end of the loan which we think is a cheap shot "junk fee". If you have a 12 month term on a fix and flip loan, and you're out of the loan by month 6, via sale or refinance, then you should not have to pay any additional penalty or interest. You should only pay interest for the time you held the loan.

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## 5-4-3-2-1 Prepayment Penalty

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A **5-4-3-2-1 prepayment penalty**, otherwise known as a 5 year stepdown prepayment penalty, charges a 5% fee on the outstanding principal loan balance if the loan is paid off in year 1, a 4% fee in year 2, a 3% fee in year 3, a 2% fee in year 4, and a 1% fee in year 5. If the loan is paid off in year 6, there will be no prepayment penalty. 

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The 5-4-3-2-1 prepayment penalty option carries a slightly lower interest rate than other pre payment penalty options, typically by 0.15% compared to the 3-2-1 prepayment penalty option, and is particularly popular among buy and hold rental investors during times of low interest rates.

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## 3-2-1 Prepayment Penalty

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A **3-2-1 prepayment penalty**, otherwise known as a 3 year stepdown prepayment penalty, charges a 3% fee on the outstanding principal loan balance if the loan is paid off in year 1, a 2% fee in year 2, and a 1% fee in year 3. If the loan is paid off in year 4, there will be no prepayment penalty. 

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The 3-2-1 prepayment penalty option carries a slightly higher interest rate than the 5-4-3-2-1 option, typically 0.15%, and is particularly popular during times of elevated interest rates, because the borrower will be able to cost effectively refi after only a few years. The 3-2-1 pre payment penalty is the most popular option among clients of OfferMarket Capital. 

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## 2-1 Prepayment Penalty

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A 2-1 prepayment penalty is a carries a slightly higher interest rate than the 3-2-1 prepayment penalty, typically 0.125%.

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## 3-0 Prepayment Penalty

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A **3-0 prepayment penalty**, charges a 3% fee on the outstanding principal loan balance if the loan is paid off in year 1, and no prepayment penalty thereafter. The 3-0-0 prepayment penalty option carries a higher interest rate than the 5-4-3-2-1 option, typically 0.4%, and is worth considering if you want to have a cost effective option to sell or refinance after the first year. 

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## 1-0 Prepayment Penalty

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A **1-0-0 prepayment penalty**, charges a low 1% fee on the outstanding principal loan balance if the loan is paid off in year 1, and no prepayment penalty thereafter. The 1-0-0 prepayment penalty option carries the highest interest rate compared to the 5-4-3-2-1 option, typically 0.65%. Like the 3-0-0 option, this is only worth considering if you expect to sell or refinance the property soon after the loan is originated. Many private lenders will require loan committee approval to offer this option, since the borrower may be trying to use this option instead of a short term bridge loan which typically carries a considerably higher interest rate. 

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## No Prepayment Penalty DSCR Loan

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Some DSCR lenders, including OfferMarket, offer a no prepayment penalty option. It is also important to note that certain states such as Pennsylvania and Ohio do not allow prepayment penalty for loans below a certain amount. In cases where there is no prepayment penalty, you can either expect a higher interest rate, or an upfront lender fee charged on the settlement statement. 

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In our core DSCR loan, in states that do allow prepayment penalty, the interest rate for no prepayment penalty is the same as the 5-4-3-2-1, however there will be a 1.125% lender fee added to the settlement statement. In scenarios where the state does not allow a prepayment penalty, we are able to offer a slightly higher interest rate (~0.25%) and/or a low additional lender fee typically not higher than 0.625% of the loan amount.

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## Extra payments on DSCR Loan

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Many borrowers do not realize that partial prepayment of principal during the prepayment penalty period are subjected to a penalty fee. So, if you have a 5-4-3-2-1 prepayment penalty clause, and you make a $1,000 additional payment towards your principal loan balance during year 1, you will be charged a 5% fee of $50. 

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## Prepayment Penalty for Fix and Flip Loan

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While pre payment penalties are a standard term for DSCR loans, they are not common for short term fix and flip loans. 

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## Instant DSCR Loan Quote and Pre-Approval

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Our friendly and knowledgeable relationship managers are always happy to review loan requests and help you select the best pre payment penalty option for your real estate investing goals. For instant DSCR loan quotes and pre-approval, visit [OfferMarket Capital](https://www.offermarket.us/loans).

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A prepayment penalty is a fee charged by a lender when the loan is repaid within a designated period of time. Prepayment penalties are common for DSCR loans from private lenders.

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Prepayment Penalty

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## What are Bad Boy Carve Outs?

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**Bad Boy Carve Outs** are provisions in [non-recourse](https://www.offermarket.us/real-estate-glossary/non-recourse) [DSCR loans](https://www.offermarket.us/blog/dscr-loan-program) that protect the lender in the event members of the borrowing entity conduct themselves in an illegal or fraudulent manner. Bad boy carveouts allow the lender to hold one or more individuals of the borrowing entity personally liable for repayment of the loan.

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## Examples that trigger Bad Boy Carveouts

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Bad Boy Carve Outs can be triggered by several different violations of loan covenants, so it is important to read your loan docs carefully and consult your real estate attorney.

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Examples include:

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- taking on subordinate (i.e. 2nd position) financing without express written consent from the 1st position lender
- forged or fraudulent tax returns, bank statements, financial statements, operating documents (i.e. rent roll)
- illegal business conduct at the subject property 

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## Non-Recourse DSCR Loans

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Non-Recourse DSCR Loans are cash-flow based loans where personal guarantee is not required.

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## Bad Boy Guaranty

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Bad Boy Guaranties or Bad Boy Guarantees are the same concept as Bad Boy Carveouts.

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## Are Bad Boy Carevouts Required?

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Removing bad boy carveouts from your loan is unlikely and may depend on several factors:

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- **securitization program guidelines and requirements**: if the lender will be selling the loan to an investor that will be securitizing the loan as part of a mortgage-backed security, then it is unlikely you would be able to remove the bad boy carve out.
- **quality of collateral**:  if the collateral (subject property) is of high quality, the lender may be willing to accept the removal of a bad boy carveout, knowing that they will have an easier time recouping their loan through [foreclosure](https://www.offermarket.us/real-estate-glossary/foreclosure) or [pledge of shares](https://www.offermarket.us/real-estate-glossary/pledge-of-shares). 
- **pledge of equity**: if the lender's [pledge of shares agreement](https://www.offermarket.us/real-estate-glossary/pledge-of-shares) is signed by the borrower, the lender may be willing to remove a bad boy carve out.
- **LTV capitalization**:  if the loan to value is conservative (i.e. 65% instead of 80%), then the lender may be willing to remove the bad boy provision from the loan agreement because the property is worth considerably more than the loan, and liquidation through foreclosure or pledge of shares should adequately allow the lender to recoup their loan principal and any fees. 

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Bad Boy Carve Outs are provisions in non-recourse DSCR loans that protect the lender in the event the borrower conducted themselves in an illegal or fraudulent manner.

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Bad Boy Carve Outs | OfferMarket Real Estate Glossary

Bad Boy Carve Outs

Grow your real estate investing business with the most competitive DSCR loan product. OfferMarket also provides DSCR rental loans, bridge loans, hard money, fix & flip, rehab, ground up construction loans.

Rental Loans

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Mortgage forbearance is a program most lenders and mortgage servicers offer to homeowners experiencing financial hardship that temporarily pauses or reduces monthly payments. Forbearance typically lasts 3 to 6 months. In situations such as the COVID-19 pandemic, forbearance programs have been extended for as much as 12 to 18 months. 

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Forbearance helps homeowners avoid [foreclosure](https://www.offermarket.us/real-estate-glossary/foreclosure). Forbearance does not eliminate missed payments, instead missed or partial payments are usually added to the end of your [amortization schedule](https://www.offermarket.us/real-estate-glossary/amortization-schedule). Forbearance programs vary, if you are struggling to make your monthly mortgage payments, please contact your lender or mortgage servicer.

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### Read our blog post: [A Closer Look At Mortgage Forbearance And Foreclosure Trends](https://www.offermarket.us/blog/a-closer-look-at-mortgage-forbearance-and-foreclosure-data)

Mortgage forbearance is a program most lenders and servicers offer to homeowners to temporarily pause or reduce monthly payments.   

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What is Mortgage Forbearance in real estate?

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Read our blog post: A Closer Look At Mortgage Forbearance And Foreclosure Trends

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