DSCR Loan Case Study

How We Closed an Investment Property in San Diego With No Income Verification, No Asset Sourcing — and Secured a 6.375% Rate*

Rate described is specific to this transaction and is not a commitment or guarantee. Terms, rates, and availability vary based on borrower qualifications, property details, and market conditions.

---

Overview of the Transaction

Not every real estate investor fits neatly into traditional lending guidelines. Many successful investors operate with non-traditional income, reinvest capital frequently, or structure finances in ways that make conventional financing difficult.

This recently closed San Diego DSCR loan case study demonstrates how the right strategy, lender relationships, and loan structure made it possible to close an investment property purchase in San Diego with:

• No income verification

• No sourced or seasoned assets

• A strong, market-competitive interest rate

All within a flexible non-QM loan program.

---

The Investment Loan Scenario

Our client approached us to finance an investment property purchase in San Diego with 20% down. While the borrower had excellent credit and a clear rental strategy, the transaction presented two significant challenges:

• No verifiable personal income suitable for conventional underwriting

• Down payment funds that could not be sourced or seasoned under standard guidelines

Under traditional loan programs, this combination would typically result in an automatic decline — regardless of credit strength.

---

Why Conventional Investment Property Loans Were Not an Option

Conventional and agency investment property loans require:

• Documented and verifiable income (W-2s, tax returns, or pay stubs)

• Fully sourced and seasoned assets

• A calculable debt-to-income ratio

In this case:

• Income could not be verified in an acceptable format

• Asset sourcing requirements could not be met

• Standard underwriting guidelines did not apply

Rather than forcing the file into a program that was not designed for this borrower profile, we evaluated alternative investment loan options.

---

The DSCR Loan Strategy

We structured the loan using a DSCR (Debt Service Coverage Ratio) program, which qualifies borrowers based on the rental income of the property, rather than personal income.

DSCR loans are commonly used by San Diego real estate investors because they:

• Do not require personal income verification

• Do not rely on debt-to-income ratios

• Focus on property cash flow and rental performance

• Offer more flexible documentation standards

This approach allowed the transaction to move forward based on the strength of the investment property itself.

---

Asset Sourcing Challenges — and the Right DSCR Lender

Even within the DSCR space, many lenders still require:

• Fully sourced assets

• Funds seasoned for a defined period

Those requirements would have stopped this transaction.

Through our lender network, we identified a DSCR investor familiar with San Diego investment properties that allowed:

• No personal income verification

• No sourced or seasoned asset requirement

• A focus on credit quality, property cash flow, and loan-to-value

• Competitive pricing relative to the flexibility of the program

Selecting the correct investor was the key factor in making this transaction viable.

---

Underwriting, Approval & Rate Secured

Once the loan was structured properly, the process moved efficiently:

• The property’s rental income supported DSCR guidelines

• The borrower’s credit profile met investor thresholds

• Loan-to-value aligned with program requirements

Despite the flexible documentation structure, we were able to secure an interest rate of 6.375%, which was highly competitive for a San Diego DSCR investment loan at the time of closing.

This rate was achieved because the file was:

• Positioned correctly from the start

• Matched with the appropriate investor

• Structured to align with pricing incentives and risk parameters

The loan was approved, locked, and closed on schedule.

Rate referenced reflects a specific closed transaction and is not indicative of current market pricing or future loan terms.

---

Final Results

✔ San Diego investment property successfully purchased
✔ 20% down payment accepted
✔ No personal income verification required
✔ No asset sourcing or seasoning required
✔ 6.375% interest rate secured for this transaction*
✔ Smooth, on-time closing

---

Why This San Diego DSCR Loan Case Study Matters

Many investors assume that flexible loan programs automatically come with unfavorable pricing. This case study shows that when a deal is structured correctly and placed with the right lender, it is possible to achieve both documentation flexibility and strong pricing — even in competitive markets like San Diego.

---

Key Takeaways for Real Estate Investors

• DSCR loans allow investment property financing without income verification

• Asset sourcing requirements vary significantly by lender

• Strong credit can offset documentation limitations

• Competitive rates may still be available within non-QM programs

• Lender access and structuring expertise matter

---

Final Thoughts

Every investor’s financial profile is different. Successful financing depends on understanding those differences — not forcing borrowers into traditional guidelines that don’t reflect how they operate.

If you’ve been told “no” due to income or asset documentation, there may be alternative solutions available.
The right structure and the right lender can make all the difference.

Written by Yana Fabi
NMLS #2588095 | DRE #02212995