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Rental Properties with Negative Cash Flow

Your rental property doesn't always need positive cash flow to qualify for financing. Our no ratio program is a back-up option to the DSCR loan, and could be key to closing your purchase or refinance.

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Investors have different strategies for investment properties, and positive cash flow isn’t always the top priority.  Suppose the property is an amazing deal, and just needs updating to maximize your return.  In order to realize that return, first you must find financing close the deal.

Another scenario where a no ratio loan may be needed: suppose you are in a high value area and have a property that makes more sense as a short term rental, but only current long term market rent may be used for qualifying.

Because the interest rate on a “no ratio” loan will be higher than one showing positive cash flow, we’ll always explore every option to try to qualify for the better pricing.  Our lenders’ DSCR programs allow you to qualify with the interest only payment on interest only loans.  This alone may let you qualify for the better priced option.

Many of the features and qualifications of these loans are very similar, but there are a few things to consider.  Without positive cash flow, you’ll need:

  • A larger down payment for a purchase, or more equity in the property for a refinance
  • More reserves (savings) available after closing  


Lenders want to see that you have the resources to make payments and carry the property during periods of lower income.