Are you involved in real estate investment or own property in New York? If so, you understand the difficulties of obtaining financing for your commercial projects. Lenders thoroughly assess loan applications, and one crucial element they consider is the Debt Service Coverage Ratio.

New York DSCR loans are a valuable tool for investors looking to secure financing for their rental property projects in New York. The Debt Service Coverage Ratio is a key indicator that measures the debt coverage capability of a property's net operating income.

Rental properties, investment properties, and other potential additions to your real estate portfolio can benefit greatly from understanding and utilizing New York DSCR loans. The above DSCR calculation is a crucial financial ratio that compares the property's gross rental income to its debt service, or mortgage payments. A higher DSCR indicates that the property generates more income in relation to its debt, increasing the likelihood of loan approval for lending purposes.



Why is New York a Good State for Real Estate Investors?

New York is a prime location for real estate investors due to its strong and resilient market. The state offers both urban and rural markets that appeal to all types of investors.

In highly sought-after urban locations like New York City, the demand for commercial properties such as office spaces and retail establishments remains consistently strong.

This vibrant city serves as a bustling business hub and draws in millions of tourists annually, thus high demand and presenting an enticing opportunity for potential real estate investors.

Rural parts of New York also offer promising investment opportunities. Places in Upstate New York provide investment potential with a different appeal, with more affordable property prices and potential for growth in sectors such as renewable energy and agriculture.

Financing rental properties and other commercial projects in New York can be a challenge, but with the availability of DSCR loans, investors have a valuable tool at their disposal. Eligibility requirements for New York DSCR loans may vary depending on the lender and the specific project, but generally, lenders look for a DSCR of 1.2 or higher.


Eligibility Criteria for a New York DSCR Loan

One of the greatest benefits of buying rental properties with DSCR loans is that you don't need to provide income or employment verification; your debt-to-income ratio isn't a factor, only your credit score. This makes it much easier to get DSCR loans as opposed to a traditional loan based on your own financial information.

To be approved by DSCR lenders in New York, there are certain eligibility criteria that borrowers must meet. Here are some key factors that lenders consider.

Cash Flow of Your Investment Property

The cash flow of personal income from your investment property is another crucial factor that lenders assess when determining eligibility for a DSCR loan in New York.

DSCR lenders calculate the cash flow by dividing the property's Net Operating Income by the annual debt service payment required on the loan, called the DSCR. The minimum DSCR is typically 1.20.

Loan-to-Value (LTV) Ratio

Along with your property's cash flow, most DSCR lenders also consider the loan-to-value (LTV) ratio when evaluating eligibility for a DSCR loan in New York. You should aim for a maximum LTV ratio of 75-80% when purchasing a property, which means you will need to provide a down payment of around 20-25%.

Some lenders may allow a smaller down payment of 15%. If you are looking to refinance your home, it is necessary to have at least 20-25% equity in the property after completing the refinance process in order to be eligible.

Credit Score

The borrower's credit score is one of the few pieces of personal financial information required. Some may go lower, but 680 is generally considered the minimum credit score required to be eligible for a New York DSCR loan by many lenders.

Down Payment and Closing Costs

For New York DSCR loans, the minimum down payment is typically 20%; however, if you provide a higher down payment, you can often secure more favorable loan terms like lower interest rates. As New York rental properties are in high demand, you want to give yourself every chance of getting that all-important loan.

Property Types Allowed

When considering eligibility for a DSCR loan in New York, lenders also take into account the type of property being financed. Available options extend beyond just single-family residences, including 2-4 unit properties, commercial apartment buildings with 5 or more units, as well as condos and unique homes that might not meet conventional lending criteria.

If you have multiple investment properties and are looking to finance them with a DSCR loan, it is important to note that lenders may have restrictions on the number of properties they will finance. However, most lenders will finance more than ten investment properties with a DSCR loan; they'll calculate DSCR based on all properties owned, and if the DSCR is higher than the loan payments, they will approve as many as desired.

If you have any concerns about how many rental properties you can include under a specific DSCR program, be sure to reach out to the loan officer for more details.




Interest Rate Statistics for New York DSCR Loans

When it comes to DSCR loans in New York, it's crucial to understand the factors and tax returns that many lenders consider when determining eligibility. At an average of 1.6%, the New York property tax rate is higher than the national average of 1%.

Investors seeking non-owner-occupied loans in New York can expect mortgage rates 1-2% higher compared to traditional loans. This is due to the fact that these loans do not require verification of the buyer's income, resulting in increased default risk.

Take advantage of the current low interest rates in New York, where you can secure a 30-year fixed mortgage at just 7.53% or a 15-year fixed mortgage at an even lower rate of 6.88%. This is a great opportunity to lock in favorable terms and make your dream home more affordable.

New York had the lowest homeownership rate in the United States in 2021 at just 55.4 percent, with only California (55.9 percent) and Nevada (59.1 percent) having slightly higher rates below 60 percent. It is interesting to note that these states also have a significant proportion of housing units with 10 or more units, whereas most states with homeownership rates above 70 percent primarily consist of single-family homes comprising over 70% of their housing stock.


Best Areas to Invest in New York with DSCR Loans

When it comes to investing in New York with DSCR loans, it's important to consider the best areas that will provide a strong return on investment. Here are a few.

📍 Long Island

The median home price is 1.3 million dollars. Rent is usually high, which is why Long Island is a popular choice for real estate investors. A rental property could yield enjoyable waterfront, suburban, or urban living. The property values in Long Island have been steadily increasing, providing potential for appreciation in the future.

📍 Rochester

Investing in the Rochester area with DSCR loans in New York is a wise choice. This bustling city with a population of over one million offers numerous housing options compared to smaller towns in New York. The average list price is less than $160,000, making it more likely for you to find a profitable property that meets the requirements for a DSCR loan when compared to other cities in New York.

📍 Otisville

Despite being home to two prisons, this location offers proximity to NYC within just 90 minutes of travel time and boasts an affordable median list price of $349,000, according to Additionally, there are plenty of opportunities to find homes at even lower prices, especially if they require some repairs. Investing in DSCR loans in these areas of New York can provide a solid return on investment.

📍 Mastic Beach

Nestled along the picturesque south shore of Long Island, Mastic Beach presents an enticing option for real estate investors seeking DSCR loans in New York. This delightful beach town has the potential to be a dream come true for short-term rental investors.

With its appealing median list price of $330,000, according to, and ample opportunities for value-add projects, savvy investors can generate significant, positive cash flow, from this charming coastal community.




Some Tips for Investing with DSCR Loans in New York

When investing with DSCR loans in New York, it's important to keep a few tips in mind to maximize your chances of success. Here are some key considerations.

Choosing the Right Property

When making investments with DSCR loans or hard money loans in New York, it is of utmost importance to carefully select the right property. It is crucial to choose a property that possesses great rental potential and has the ability to generate substantial cash flow to easily cover debt service payments in comparison to the purchase price.

Opting for a property with a high DSCR, ideally surpassing 1.20x, serves as an indicator of favorable liquidity conditions and provides an additional buffer for loan repayment each year.

Purchase Fixer Upper properties

Investing in fixer-upper properties with DSCR loans in New York can be a smart move. By purchasing these properties at a lower cost and making renovations, you have the opportunity to increase their value significantly. This strategy offers potential financial benefits and is worth considering for savvy investors.

Utilizing Local Knowledge and Expertise

Investing in DSCR loans in New York requires knowledge of the local market and expertise in real estate investing. By utilizing the expertise of local real estate professionals, you can gain valuable insights into market trends, property values, and rental demand. This can help you make informed decisions and maximize your return on investment.

Ensuring a Positive DSCR Ratio

It is essential to prioritize a positive Debt Service Coverage Ratio when making investments with DSCR loans in New York. The DSCR serves as an indicator of how well a property can cover its debt service payments using rental revenue.


Closed DSCR Loans New York

Check out some of Visio Lending's recently closed DSCR loans in New York.


Buffalo, NY


 Buffalo, NY

  • $195,000 Loan Amount
  • Cash-Out Refinance
  • LTR 
  • DSCR: 1.51
Brooklyn, NY


 Brooklyn, NY

  • $825,000 Loan Amount
  • Purchase
  • LTR
  • DSCR: 1.22


 Rock Stream, NY 

  • $532,000 Loan Amount
  • Purchase
  • STR
  • DSCR: 2.42

Frequently Asked Questions

A DSCR loan focuses on the property's cash flow by calculating the debt service coverage ratio (DSCR). The DSCR calculation divides the rental income by the mortgage payment in order to see whether the property will generate positive cash flow. You should strive for a DSCR ratio of 1.25 or more.

New York is a bustling real estate market, and finding DSCR loans can be challenging. However, with the right approach and by partnering with experienced lenders or mortgage brokers who specialize in DSCR loans, you can increase your chances of finding suitable financing options.

Those who prove they are familiar with investment properties, such as investors who work with a property management company, may be more likely to get funding for rental properties here.

Yes, DSCR loans can be used for both residential and commercial properties if they meet the necessary criteria as investment properties or commercial loans.

The loan amount and down payment required for a DSCR loan can vary depending on the lender and the specific property. It is recommended to have a substantial down payment of at least 20-30% to increase the likelihood of loan approval and secure favorable loan terms.

Some DSCR lenders may allow prepayment, but it is essential to review the terms and conditions of the loan agreement.

A DSCR loan in New York presents numerous advantages, making it a highly appealing financing option for investors. These loans not only offer a reliable and unbiased measure of a property's income-generating capacity and ability to meet debt service requirements but also lower the risk of default.

map of new york

Our DSCR Loans in New York have:

  • · Full 30 year terms, no balloons for rental residential properties

  • · The ability to finance in an LLC

  • · No tax documents or personal income verification

  • · Real estate investor-friendly loan programs

  • · Interest only loan options


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