Capital for DSCR lendersfor business-purpose rental loans.
DSCR loans are long-term business-purpose rental loans underwritten on the property’s income. Holding them ties up capital for years. With Lender Capital you submit a first-lien DSCR loan and one capital partner whose criteria it fits funds the whole loan at closing.
- First-lien, business-purpose
- Funded whole at closing
- Pay only when a loan funds
LOAN FILE · LC-0142
ExampleHarbor Street Mixed-Use
Submitted by a vetted private lender
- Loan type
- Bridge · 1st lien
- Collateral
- Mixed-use, 4 units
- Loan amount
- $1,850,000
- Loan-to-value
- 65%
- Term
- 12 months
Submitted
Reviewed
Matched
Funded
Loan file received
Appraisal, title, borrower and terms
Key takeaways
- DSCR loans are long-term, so holding them on your balance sheet or a line ties up capital far longer than a bridge loan.
- Many DSCR lenders sell loans after closing; that means funding first and carrying the loan until it sells.
- With table funding, one capital partner funds the whole loan at closing and the loan is assigned to it.
- You keep your points (less the placement fee), earn a spread above the partner’s rate, keep the borrower and service the loan.
Why is funding DSCR loans different?
A DSCR (debt service coverage ratio) loan is a business-purpose loan on a rental property, sized on whether the property’s income covers the loan payment. See what a DSCR loan is. Unlike a bridge loan, it may run for decades, so:
- Holding them uses your capital for years. A lender that keeps DSCR loans needs long-term capital, not a short revolving line.
- Selling after closing means funding first. Many lenders fund DSCR loans and sell them later, which requires capital or a line to carry the loan until it sells, and exposes them to pricing changes in between.
- Eligibility is specific. Buyers and lines set rules on coverage ratio, leverage, property type and borrower credit.
How do DSCR lenders fund more loans?
With direct capital placement, a capital partner reviews the full file before closing, funds the whole loan at closing, and the loan is assigned to it, so you don’t carry it while you look for a buyer. You set the borrower’s note rate, earn the spread above the partner’s rate and your points, and keep servicing as agreed.
What do capital partners look for in a DSCR loan?
Each capital partner sets its own criteria. Expect them to review the DSCR calculation and its inputs (rent, taxes, insurance, HOA), the lease or market rent analysis, loan-to-value, property type and condition, the borrower’s credit and experience, title and insurance, and any prepayment terms.
The DSCR loan file
Capital partners review the full file before committing. A complete file is the fastest way to a decision.
Loan file · LC-0142
Shared before you commit
- Appraisal with rent schedule or market rent analysis
- Leases and rent roll
- DSCR calculation with taxes, insurance and HOA
- Borrower credit and experience
- Title commitment and insurance
- Your term sheet, pricing and prepayment terms
Submit the loan. One partner funds all of it.
You keep your points (less the placement fee), earn the spread above the partner’s rate, keep the borrower and service the loan.
- 01
Apply once
We review your lending business: track record, underwriting and the licenses your states require.
- 02
Submit the DSCR loan
A first-lien, business-purpose loan with the full file, before closing.
- 03
We match it
We send it only to capital partners whose criteria it fits. They see the full file before committing.
- 04
Funded at closing
One capital partner funds the whole loan and it is assigned to them. You keep the borrower and service the loan.
Frequently asked questions
How do DSCR lenders get funding?
Common sources are the lender’s own capital, lines or credit facilities, selling loans after closing (individually or under forward flow agreements) and direct capital placement, where a capital partner funds the whole loan at closing.
Does Lender Capital place DSCR loans?
Yes: Lender Capital places first-lien, business-purpose DSCR rental loans. No consumer or owner-occupied loans.
Do I keep servicing on a placed DSCR loan?
Yes: with Lender Capital you keep the borrower relationship and service the loan as agreed with the capital partner.
Sources
- Simmons Bank, Warehouse Lending (an example bank program: lists bridge and construction loans as ineligible, does not finance hard money or fix-and-flip loans, and requires personal guarantees from 10% owners)
- Kim, Laufer, Pence, Stanton and Wallace, “Liquidity Crises in the Mortgage Market,” Federal Reserve Board FEDS 2018-016 (warehouse line mechanics: haircuts, margin calls, covenants, guarantees, 364-day terms)
Lender Capital is a business-to-business platform. This page is general information, not legal, tax or securities advice. Terms of warehouse lines and other funding sources vary by provider; confirm them with each provider and your counsel.
Have a DSCR loan you can’t fund yourself?
Apply once. Every lender is reviewed before submitting loans.