Expanding Your Real Estate Portfolio: Understanding Foreign National, Non-DSCR, and Multi-Family Loan Options
Real estate investors are always seeking diverse financing solutions to expand their portfolios. This article delves into three distinct loan programs: Foreign National Loans, Non-DSCR Loans, and Multi-Family Loans, highlighting their unique features and benefits.
1. Foreign National Loans: Opportunities for International Investors
Foreign National Loans cater to individuals residing outside the United States who wish to invest in U.S. real estate. Key features include:
- Loan-to-Value (LTV):
- Purchase: 65% LTV
- Cash-out: 60% LTV
- Rate & Term: 65% LTV
- With U.S. FICO Score: 75% LTV
- Without U.S. FICO Score: 65% LTV
Key Takeaways:
- This program acknowledges the unique circumstances of international investors.
- The higher LTV for those with a U.S. FICO score highlights the importance of establishing U.S. credit.
2. Non-DSCR Loans: Flexibility for Varied Income Scenarios
Non-Debt Service Coverage Ratio (Non-DSCR) loans don’t strictly rely on the property’s cash flow. This makes them suitable for investors with varying income streams or those undertaking projects with fluctuating income.
- Loan Amount: $75,000 to $6 million
- LTV:
- Purchase: 75%
- Cash-out: 75%
- Rate & Term: 75%
- Loan Terms: 30 years, or Alternative 5 year IO
- Prepayment Penalties: 5-4-3-2-1, or 1 year
- Credit Score: 650 FICO
- Occupancy: Can be vacant or occupied
Key Takeaways:
- This program offers flexibility for properties with non-standard income situations.
- The 75% LTV across the board makes them attractive for high-leverage investors.
Additional Foreign National Non-DSCR Options
- Loan Amount: $100,000 – $7 Million
- LTV:
- Purchase – 75%
- Cash-out – 75%
- Rate/Term – 75%
The features and benefits provided by the Non-DSCR Loans, also apply in these instances, where there is a foreign national investor, and an increase to the maximum loan amounts permitted.
3. Multi-Family Loans (5-8 Units): Scaling Your Portfolio
Multi-Family Loans are designed for investors looking to acquire or refinance properties with 5-8 units, facilitating portfolio growth:
- Loan Amount: $250,000 to $5 million
- LTV:
- Purchase: 75% LTV
- Cash-out: 70% LTV
- Rate/Term: 75% LTV
- Loan Terms: Standard 30 years, or Alternative 5, 7, 10, IO/ARM
- Prepayment Penalties: 5-4-3-2-1, 3-2-1
- Credit Score: 680 FICO
- Occupancy: 100% occupied
Key Takeaways:
- This program supports scaling investments in multi-family properties.
- The slightly lower cash-out LTV reflects a more conservative approach to refinancing.
Choosing the Right Loan Program
Selecting the appropriate loan program depends on your individual circumstances and investment goals. Foreign National Loans open doors for international investors, Non-DSCR Loans provide flexibility for diverse income scenarios, and Multi-Family Loans support portfolio expansion.
It’s always recommended to consult with a qualified lender to discuss your specific needs and determine the best financing strategy.
