There are many residential real estate investors who own one to four unit investment property with lot’s of equity and great rates. A lot of these investors would like to get cash from the equity in their properties but do not want to refinance to higher rates for another thirty years.

The Solution is a new product, the Cash Out DSCR Second Mortgage. This product allows Cash Out of your 1 to 4 unit investment property without losing the low rate on your current mortgage, without starting a new 30 year term or without losing the accelerated principle reduction investors now experience because they have had a mortgage for a number of years. The Cash Out DSCR Second Mortgage is a DSCR Rental loan where there is no income verification and the loan is underwritten based on the cash flow of the property. This business purpose loan can help many investors and save them thousands of dollars while allowing them to continue to grow their portfolio. Here are a few Benefits of the Cash Out DSCR Second Mortgage.

Benefits of a Cash Out DSCR Second Mortgage: Unlocking Equity

For real estate investors, financial flexibility is key. A cash out DSCR (Debt Service Coverage Ratio) second mortgage is a strategic tool that offers a wealth of benefits, empowering investors to leverage equity for growth without disrupting existing loans.

A DSCR second mortgage focuses on the cash flow of the property rather than personal income, making it ideal for investors with multiple properties or non-traditional income streams. By using the property’s rental income to qualify, borrowers avoid the scrutiny of complex personal financials, enabling a streamlined approval process.

The cash-out feature unlocks your property’s equity, providing immediate liquidity to reinvest in new opportunities, fund renovations, or consolidate high-interest debt. Instead of letting equity sit idle, this approach turns it into a powerful asset, fueling portfolio growth or improving cash flow.

Because it’s a second mortgage, this option leaves the first mortgage intact, avoiding the potential expense and hassle of refinancing a favorable primary loan. Borrowers can access capital without losing their low interest rates or favorable terms on their first loan.

A Cash Out DSCR second mortgage also enhances flexibility. With fixed or interest-only options available, investors can choose terms that align with their financial strategies, optimizing cash flow while planning for the future.

Terms of the Cash Out DSCR Second Mortgage: a Business Purpose Loan

Loan Amount: $50,000 to $500,000

Loan To Value: Up to 85%

Loan Term: 20, 25, or 30 years

Prepayment Term Options: 5 year, 3 year, or 1 year

Current Rates: 8.5% to 10.5% depending on credit score, LTV, property location and property type. (rates as of this writing. rates change daily)

Qualifications of the Cash Out DSCR Second Mortgage: a Business Purpose Loan

Eligible States: Nationwide in 41 states and Washington DC, except; 1. Arizona 2. California 3. Minnesota 4. Nevada 5. North Dakota 6. Oregon 7. South Dakota 8. Vermont 9. Utah

Property Type: 1. Single Family Residence  2. 2-4 Unit Multifamily  3. Condominium (Warrantable only)  4. Townhomes

Credit Score: 680+ – 65% LTV, 700+ – 70% LTV, 720+ – 75% LTV 740+ – 80% LTV, 760+ 85% LTV (Single Family Home only)

DSCR Requirements: 1.10% up to 75% LTV, 1.20% up to 80% LTV, 1.25%, up to 85% LTV

Eligible Borrower: The borrower must be one of the following business entities: 1. Limited partnership 2. Limited liability company  (All members with 20% ownership or more must be guarantors) 3. Corporations

Finally,

Whether you’re expanding your portfolio, boosting property value, or securing funds for unexpected expenses, a cash-out DSCR second mortgage is a tailored, practical solution for today’s savvy real estate investor. By thinking strategically about equity, you can turn untapped potential into actionable success. for more information call FBC Funding @ 888-848-3114 or email louisj@fbcfunding.com

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