Debt Service Coverage Ratio (DSCR) Loans in Missouri


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Debt Service Coverage Ratio Loans

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Best DSCR Loans in Missouri

Key Terms

  • Strong rental income and cash flow help meet loan requirements.
  • Special loans prioritize the property’s cash flow over minimum credit score, ideal for diverse income sources.
  • Competitive mortgage loan terms and favorable loan-to-value ratios in unique loan programs.

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You’re our first priority. We want you to understand how we make money. This post may contain affiliate links. Biglaw Investor may receive a commission at no additional cost to you if you click on the links in this article. This may influence which products we write about and where and how the products appear on a page. However, it does not influence our evaluations. Our opinions are our own. In some circumstances, if you work with us, we are able to provide an incentive to work with our advertising partners that is unavailable if you work with our advertising partners directly. Our partners cannot pay us to guarantee favorable reviews of their products or services. To read more about how we make money, click here.

Easy Street Capital

(All 50 States Except NV, ND, SD)

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usually responds within 30 minutes

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Easy Street Capital

(All 50 States Except NV, ND, SD)

Easy Street Capital’s EasyRent loan program provides DSCR loans for cash-flowing investment properties. Flexible underwriting and ultra-competitive terms.

Loan Products

  • DSCR Loans: With rates starting at just 5.99% interest rates, 20% minimum down payment, no DSCR minimum, vacant properties OK.
  • Short Term Rental Loans: Leading loans for short term rentals (Airbnb); qualify with AirDNA projections and no operating history required. Rural, Vacation, and Seasonal Markets OK.
  • BRRRR Loans: Cash-out refinance DSCR Loans up to 75% with low seasoning requirements, 100% of capital invested returned in as little as 3 months
  • Multifamily Loans: 5-10 Unit properties financed on 30-year fixed rate loans with interest-only and easy qualification options. Mixed Use Loans: DSCR Loans for Mixed Use properties up to 8 units (including up to 3 commercial units)
Lender Facts
Minimum Loan

$100,000

What We Do
  • DSCR Loans Rates starting at 5.99%
  • 30-Year Fixed Rate; 10-Year Interest-Only Available
  • No DTI, No W2, No Tax Returns Needed
  • Borrow through an LLC or Entity
Not Available
  • No renovations needed
  • No properties > 10 units
  • No owner-occupied properties
  • No credit below 640

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You’re our first priority. We want you to understand how we make money. This post may contain affiliate links. Biglaw Investor may receive a commission at no additional cost to you if you click on the links in this article. This may influence which products we write about and where and how the products appear on a page. However, it does not influence our evaluations. Our opinions are our own. In some circumstances, if you work with us, we are able to provide an incentive to work with our advertising partners that is unavailable if you work with our advertising partners directly. Our partners cannot pay us to guarantee favorable reviews of their products or services. To read more about how we make money, click here.

New Silver Lending

(All 50 States Except AL, AK, ID, LA, NV, ND, OR, SD, UT, VT)

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usually responds within 30 minutes

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New Silver Lending

(All 50 States Except AL, AK, ID, LA, NV, ND, OR, SD, UT, VT)

Expand your rental portfolio with New Silver’s lightning-fast DSCR loans, closing in days, not weeks. Get approved online in under 5 minutes, including an instant online term sheet.

Ready to grow your portfolio with confidence? Apply now and see how fast and easy real estate investing can be with New Silver Lending at your side.

Loan Products

  • DSCR Loans: A 30-year fixed loan tailored for rental properties—ideal for growing your rental portfolio. Up to 80% LTV. No minimum DSCR required.
  • Fix & Flip Loans: Hard money loans designed for purchasing, renovating, and reselling investment properties—perfect for executing quick fix-and-flip projects.
  • Ground Up Loans: Up to 100% construction financing for residential builders—ideal for developers ready to break ground.
Lender Facts
Minimum Loan

$150,000

What We Do
  • 30-year fixed rate—no rate surprises
  • No minimum DSCR—flexibility you need
  • Up to 80% LTV—maximize your leverage
  • Instant term sheet
  • Instant proof of funds
  • Special discounts for repeat borrowers
  • Short Term Rental Loans also available
Not Available
  • No rural properties
  • No properties > 8 units
  • No owner-occupied properties
  • No 100% financing

Missouri presents a dynamic real estate market, from the bustling streets of St. Louis to the serene Ozark landscapes. The state’s real estate offerings are well-suited for DSCR loans, which prioritize property income over personal financial history, making them a viable option for a broad range of investors.

The homeownership rate in Missouri is [fred_homeownership state=”MO”], as indicated by the Federal Reserve. This high rate reflects a stable and inviting market environment where residents are enthusiastic about investing in real estate.

The vacancy rate in Missouri, according to the US Census Bureau, is [fred_vacancy_rate state=”MO”]. This metric is crucial for investors relying on DSCR loans, as it impacts how swiftly they can transform properties into income-generating assets.

The median listing price for homes in Missouri, according to the St. Louis Fed, is $299,450. This diverse pricing allows for a variety of investment approaches, from entry-level housing options to more luxurious ventures.

In the sections that follow, this guide will delve into the strategic use of DSCR loans in Missouri. We will cover how to choose the best loan providers and understand the nuances of the Missouri real estate market to maximize investment opportunities.

What are the main advantages of a Missouri DSCR loan?

Missouri’s real estate investors, particularly those focusing on markets in Kansas City, St. Louis, and beyond, find DSCR (Debt Service Coverage Ratio) loans to be highly advantageous for funding investment properties. These loans are specifically designed to assess a loan’s viability based on the cash flow and income generated from rental properties, rather than relying solely on the borrower’s personal income.

Key advantages:

Emphasis on property cash flow: DSCR loans in Missouri prioritize the cash flow from rental properties. This is particularly beneficial for properties in metropolitan areas like Kansas City and St. Louis where rental income can be robust, allowing for favorable debt service coverage ratios.

Simplified lender requirements: Missouri lenders offer DSCR loans that require minimal personal income documentation from borrowers, focusing instead on the net operating income of the property. This makes the loan application process more straightforward and accessible, especially for investors who might not meet traditional income documentation standards.

Flexibility in loan terms and conditions: DSCR loans provide flexible loan terms, including competitive interest rates and loan-to-value (LTV) ratios, which can be particularly attractive compared to conventional mortgage loans.

Diverse financing options: These loans support a range of financing needs, from purchasing single-family homes to multifamily units and even commercial properties. Additionally, options like cash-out refinance are available, allowing investors to leverage their properties’ equity for further investment or debt consolidation.

Favorable for various property types: Investors can use DSCR loans for different types of investment properties, including long-term rentals, short-term vacation rentals, and flip projects. This versatility is ideal for building a diverse real estate portfolio.

The pros and cons of pursuing a DSCR loan in Missouri

While DSCR loans offer a myriad of benefits to real estate investors in Missouri, considering both advantages and potential challenges is crucial for making informed decisions. Here are a few of the main considerations to think about when making a decision.

Pros:

  • Investment leverage: By securing loans based on the rental property’s income, investors can potentially obtain larger loan amounts, enabling the acquisition of more valuable properties or expansion into new markets.
  • Rapid financing: The focus on property income rather than personal financial history can lead to quicker loan processing and closing times, allowing investors to capitalize on investment opportunities swiftly.
  • Reduced personal financial scrutiny: Investors benefit from the reduced emphasis on personal credit scores and traditional income verification, which can be advantageous for those with complex finances or variable income.
  • Enhanced portfolio growth: DSCR loans are an excellent tool for investors looking to grow their real estate portfolios without being hindered by the borrowing caps that traditional lenders might impose based on personal income.

Cons:

  • Higher interest rates: The interest rates for DSCR loans are typically higher than those for conventional loans, reflecting the increased risk taken by lenders due to the reliance on rental income rather than personal income.
  • Dependence on rental income: The loan’s success heavily depends on the property’s ability to generate consistent rental income. Fluctuations in occupancy rates or rental market downturns can significantly impact the ability to cover mortgage payments.
  • Upfront costs: Higher down payments and potentially other upfront costs like origination fees might be required, representing a significant initial investment that could be a barrier for some investors.
  • Market sensitivity: The performance of DSCR loans is closely tied to the local real estate market’s health. Investors need to stay informed about regional market conditions and trends, particularly in the rental sectors of cities like Kansas City and St. Louis, to ensure their investments remain profitable.

In summary, DSCR loans in Missouri offer substantial advantages by allowing real estate investors significant flexibility in financing their properties based on the income those properties generate.

These loans are particularly beneficial for investors looking to expand their portfolios or those facing challenges with traditional financing due to irregular personal income.

However, potential borrowers must carefully evaluate their ability to manage the associated risks and ensure that their investment strategy aligns with current and projected market conditions.

Examples of investors who take out a DSCR loan in Missouri

Missouri, with its vibrant cities and expansive rural areas, offers diverse opportunities for real estate investors. DSCR loans are particularly beneficial here, allowing investors to focus on property income. Here are two examples of investors using DSCR loans in Missouri:

Example of a landlord: Imagine Lisa, a landlord in Kansas City who owns multiple rental properties across the city. She is looking to expand her portfolio by acquiring additional rental units in a developing area. By using a DSCR loan, Lisa can qualify for the loan based on the cash flow from her existing properties. This approach enables her to efficiently grow her investments and capitalize on Kansas City’s increasing rental demand.

Example of a fix-and-flip investor: Consider Mike, a fix-and-flip investor in St. Louis. He plans to purchase an older property in a historic neighborhood that requires significant renovation. With a DSCR loan, Mike can qualify based on the income potential of the renovated property, enabling him to finance both the purchase and renovation costs. This approach helps him to maximize returns in St. Louis’s competitive real estate market.

Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.

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