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Debt Service Coverage Ratio Loans
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Best DSCR Loans in Rhode Island
Key Terms
DSCR loans in Rhode Island offer real estate investors a strategic financing option by prioritizing property income over personal financial history.
Distinct advantages include flexible borrower requirements and enhanced buying power, though they come with higher interest rates and notable market dependence.
Careful planning and market understanding are critical, especially given the higher risks and investment costs associated with DSCR loans in Rhode Island.
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’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
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.
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.
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.
Ridge Street’s DSCR loans allow real estate investors to purchase and refinance rental properties in 35 states, with industry-leading pricing and fast closing times for both long- and short-term rentals.
Loan Products
DSCR Loans For Long Term Rentals: Rates from 6.0% on cash flowing rental properties. Up to 80% LTV with a DSCR of 1.0 required.
DSCR Loans For Short Term Rentals: Rates from 6.75% on Airbnb and VRBO properties. Monthly rent used in DSCR calculation is based on AirDNA projected cashflow instead of 12 month track record.
DSCR Loans For Cash Out and Refinance: Ideal for BRRRR investors, we offer refinancing and cash-out options up to 80% LTV.
DSCR Loans For Multifamily Properties: 30-year loans for multifamily properties up to 25 units, with up to 80% LTV and a maximum loan amount of $2M.
Lender Facts
Minimum Loan
$50,000
What We Do
DSCR Loan Rates starting at 6.0%
Minimum DSCR of 1.0 required
Up to 80% LTV on purchases and refinances
Up to 75% LTV on cash-outs
Short-term rentals allowed
660+ credit score required
0% origination fee available
Not Available
No 100% financing
No properties > 25 units
No owner-occupied properties
No credit score below 660
With its charming coastal towns and vibrant urban centers like Providence, Rhode Island offers unique real estate investment opportunities. DSCR loans are especially beneficial here, allowing investors to prioritize property income over personal financial histories, perfectly suiting the state’s diverse market.
The homeownership rate in Rhode Island stands at [fred_homeownership state=”RI”], according to the Federal Reserve. This strong rate reflects a stable housing market and underscores the confidence Rhode Islanders have in investing in their local neighborhoods.
Rhode Island’s balanced real estate market is further highlighted by a [fred_vacancy_rate state=”RI”] vacancy rate. This vacancy rate, provided by the US Census Bureau, is essential for investors using DSCR loans as it influences how swiftly properties can be turned into profit-making ventures.
The median listing price of homes in Rhode Island, noted at $511,225 by the St. Louis Fed, showcases a market that accommodates diverse buying preferences—from affordable family homes to upscale residences.
The upcoming sections of this guide will delve deeper into the strategic employment of DSCR loans in Rhode Island. We’ll discuss the best approaches for selecting providers, navigating the market effectively, and maximizing returns in this dynamically vibrant state.
Pros/Cons of Rhode Island DSCR loans
Delving into the specifics of Debt Service Coverage Ratio (DSCR) loans in Rhode Island, these financial products offer tailored solutions primarily for real estate investors focusing on income-generating properties.
DSCR loans in Rhode Island cater to the unique dynamics of the local market, encompassing diverse settings from the bustling streets of Providence to serene beachfront properties. Here are some of the main pros and cons to keep in mind when making this decision:
Pros:
Focus on investment properties: Specifically designed for properties expected to generate substantial rental income, Rhode Island DSCR loans provide financing based on the property’s ability to produce cash flow rather than the borrower’s personal income.
Flexible borrower requirements: Lenders assess eligibility primarily through the debt service coverage ratio rather than personal credit scores or income levels. This flexibility benefits investors who might not qualify for conventional loans due to fluctuating incomes or who are investing through LLCs.
Enhanced buying power: With higher potential loan amounts, investors can leverage DSCR loans to fund multifamily units or high-value properties in Rhode Island’s competitive markets like Providence, where robust rental markets offer promising returns. This can also be a significant benefit when it comes time to cash out or refinance.
Diverse property investments: Property investors can use DSCR loans for various property types including single-family homes, condos, and multifamily complexes, broadening investment opportunities across Rhode Island. DSCR loans are also a great choice for long-term rentals, short-term rentals, and fix and flip investment strategies.
Cons:
Higher interest rates and fees: Reflecting the higher risk associated with relying on rental income, DSCR loans often come with higher interest rates compared to traditional mortgage loans. This can impact the long-term cost-effectiveness of investments.
Significant down payment: DSCR loans typically require a larger down payment, often ranging from 20% to 30% of the property’s value, which can be a barrier for investors with limited upfront capital.
Market dependence: The success of investments funded by DSCR loans is heavily tied to the real estate market’s health and the rental properties’ performance. Any downturn in the market or vacancy increases could significantly affect profitability.
Rhode Island’s DSCR loans, a specific type of loan program tailored for diverse real estate investments, require careful consideration of eligibility, net operating income, and potential debt obligations. These products offer unique opportunities through various loan programs but come with higher risks and costs, particularly under fluctuating market conditions.
Is a Rhode Island DSCR loan right for you?
Deciding whether a Rhode Island DSCR loan aligns with your financial strategy requires a thorough understanding of your investment goals and market conditions.
Ideal candidates for DSCR loans are seasoned real estate investors with established portfolios and a deep understanding of market dynamics. These investors should be prepared to manage potential fluctuations in cash flow and ensure they have sufficient reserves to cover higher down payments and any unforeseen expenses.
Potential borrowers should also consider the loan terms, underwriting processes, and eligibility criteria set by lenders. Assessments typically include reviewing the property’s net operating income, the borrower’s credit score, and other financial indicators like tax returns and bank statements to determine loan viability.
In other words, while DSCR loans offer substantial opportunities for growth and flexibility in real estate investment in Rhode Island, they also carry risks that must be carefully weighed. Consulting with financial advisors and conducting detailed market research will help determine if a DSCSR loan is the right financial tool for your real estate endeavors in Rhode Island.
Examples of investors who take out a DSCR loan in Rhode Island
Rhode Island, with its charming coastal towns and vibrant urban centers like Providence, presents a unique opportunity for real estate investments. DSCR loans are particularly advantageous as they allow investors to focus on property income rather than personal financial histories. Here are two examples of investors using DSCR loans in Rhode Island:
Example of a real estate investor: Imagine Sarah, a real estate investor in Providence who is looking to purchase a multi-family residential property in the city’s historic district. By utilizing a DSCR loan, Sarah can qualify for the loan based on the projected rental income from the property rather than her personal financial history. This strategy allows her to secure the necessary financing to add a valuable asset to her portfolio, capitalizing on Providence’s strong rental market.
Example of a seasonal rental owner: Consider John, a seasonal rental owner in Newport planning to buy a vacation property near the waterfront. By using a DSCR loan, John can qualify based on the anticipated rental income during peak tourist seasons. This approach allows him to secure the necessary financing to invest in the vacation rental market, capitalizing on Newport’s booming tourism industry.
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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