DSCR Loan Missouri

Last updated: December 9, 2024

How Do DSCR Loans Work in Missouri?

The overall process of getting a DSCR Loan in Missouri is approximately as follows. You submit an application for a loan (you can get started on your loan with an instant quote) answering 14 questions about your property. An instant quote will tell you if you qualify for the loan in under 1 minute of your time. It will also show you the a preliminary interest rate and loan amount. Once you select desired LTV (which can be changed later), your quote will be converted to a Loan File for processing purposes.

You will have to submit documents as part of your Loan File for underwriting. Documents we may ask for will include personal and property documents such as purchase contracts, current leases, borrowing entity documents, deeds, title work (we will engage a title company or an attorney on your behalf to draw up these documents), background and credit reports (that we will order), bank statements for liquidity verification as well as other documents that may be applicable to your specific deal. Full list of requirements can be found here in DSCR loan requirements.

We will also handle all the aspects of scheduling and appraisal for you. Please note that we have a promotion, where new clients receive a 100% refund at closing for their appraisal and existing clients forever get a 50% refund for their appraisal at closing as our way to say thank you for allowing us to partner with you! Once all the loan documents are submitted, the Loan File goes through underwriting, at which point the underwriting committee may ask for additional documents depending on their discretion. Once the committee receives all the documents and approves the file, closing can be scheduled.

The closing, will be handled by the title company or at the office of closing attorney. Once closing is complete, funds will be wired. Post closing, the loan will be entered into servicing and you will receive information regarding setting up auto-pay or other options that may be available for your loan depending on the specific servicer's capabilities.

Where can I find investment properties in Missouri?

There are many online and offline places where you can find investment properties. Some of them include:

1. OfferMarket - Get an instant email alert when a new property is listed in your target area. Instant off market listing alerts
2. Craigslist - Craigslist's local marketplace is perfect for finding sellers who want to work directly with the buyer.
3. Zillow - Zillow should always be part of any experienced real estate investor just to keep tabs on what the general market in their target area is doing. You can save search on zillow to get email updates regarding your target area.
4. Redfin - Redfin should also be used for understanding local market trends. Set up email notifications for Redfin here.
5. Facebook Marketplace - Facebook Marketplace is a new comer to the list. Should be part of everyone's toolkit.
6. Ebay - Yes, you heard it right, ebay can also be a great place to find properties.

Can you lend on properties worth less then $100k?

In short, no, appraisal as is value must come in at above 100k. We can only lend on properties that are less then $100k if they are in a portfolio with other properties and the portfolio's total as-is value on the appraisal is above $250k. In order to qualify for our loans, the property must appraise for at least $100k as-is at the time of the appraisal, however, total loan amount may be less then 100k, minimum loan amount is $55k.

What are the requirements for a DSCR loan in Missouri?

If you scroll up on this page, you will see a simple checklist that details high level requirements for our DSCR loans in Missouri. If you want a more detailed quote for your specific deal, click "start" next to "apply for a DSCR loan" and our online quoting system will produce an accurate quote based on 14 questions related to your deal. Most investors are able to get a complete quote in under a minute because those 14 questions most investors will know answers to. Our most detailed DSCR Loan Requirements can be found here. Once you complete an online quote, you can proceed to your Loan File, where you can peruse the Loan Terms which will detail all the fees and proceeds of the loan in one convenient interface. Get an instant loan quote and Loan File

Otherwise, you can read on to see common guideline breakdowns:

Credit Score

In most cases, a 720 credit score will qualify you for the lowest interest rate and highest loan amount. We recommend protecting your credit score and striving for a 740+ score to make sure you get the best terms.

No Seasoning

Most DSCR lenders require 6 months of seasoning. At OfferMarket, we have a no seasoning program for qualified borrowers. We also offer 90 day (3 month) seasoning for borrowers with 700+ credit score or 5+ rental experience.

Rural Properties

Rural properties are not a good fit for DSCR loan programs. If your property is considered rural in any of the following ways, it may not be eligible:

• Rural designation by Federal Government (CFPB, USDA)
• Rural designation by appraiser
• Population under 10,000
• 5+ miles from a 100,000+ population center

Rural designation is a gray area so we recommend proceeding with caution on any purchase where the subject property checks one or more of the above bullets. Overall, we can't lend on rural properties.

How can I find out, if my property is rural?

Here are more detail on how to verify if your property is rural in our Rural Designation Search Tools. The 2 search tools are hosted by USDA Rural Development Property Eligibility and CFPB Rural and Underserved Areas Checker. Both of the tools must flag the property as not rural for it to be eligible for our funding. Use these instruction to find out if your property is considered rural

What areas in Missouri do you serve?

Missouri's population grew a modest 2.8% between 2010-2020, with growth primarily concentrated in the major metro areas around St. Louis and Kansas City. The state's economy is diversified across sectors like agriculture, manufacturing, healthcare, and professional services. Housing starts statewide have generally kept pace with population growth over the past decade. However, certain areas have experienced more robust housing demand and tighter supply/demand dynamics of interest to rental investors. Now let's look at some of the specific zips:

• 63017 - Part of the fast-growing St. Charles County area of St. Louis metro. Major employers like Centene, Mastercard, and Boeing have driven population influx. Housing starts up but may still be outpaced by demand.
• 65109 - Located in Christian County near Springfield. This suburb saw 20% population growth as people moved from St. Louis/Kansas City. Apartment construction hasn't matched single-family building.
• 63368 - The outer suburbs of West County in St. Louis. Limited new rental housing combined with high-income demographics point to potential for future rent growth.

Kansas City, MO

The Kansas City metro area anchors western Missouri, with the economy driven by sectors like transportation/logistics, healthcare, automotive, and professional services. Overall population growth was around 5% from 2010-2020. Housing starts have generally kept up with demand, though certain submarkets are exhibiting tighter conditions:

• 64155 - Part of Overland Park in Johnson County, KS. High-income area with a limited rental market and strong demand from job growth.
• 64030 - The Lee's Summit suburb experienced double-digit population expansion. New apartment construction is underway but may lag for a few years.
• 66062 - This Lenexa zip code near the KCI Interchange has seen a surge of apartment construction to accommodate rapid job growth in the area.

St. Louis, MO Area

While the City of St. Louis itself has witnessed population losses, the overall St. Louis metro area added 125,000 residents from 2010-2020, a 4% increase driven by growth in surrounding counties like St. Charles, St. Louis County, and others. Major employers like Anheuser-Busch InBev, Express Scripts, Boeing, and Washington University serve as economic anchors. New housing construction has been relatively healthy overall to match demand.

• 63368 - As mentioned, this affluent West County suburb has extremely limited rental housing stock amid high incomes.
• 63005 - St. Charles remains a fast growth area with major employers continuously adding jobs. Some pockets exhibit imbalances between supply and demand.
• 63129 - Close to Washington University, with housing geared heavily toward students and staff. Always a very tight rental market.

Springfield, MO Area

The Springfield metro area in southwest Missouri grew over 6% from 2010-2020, one of the higher growth rates in the state. The economy is driven by healthcare, manufacturing, logistics, and education sectors. Housing starts have ramped up in recent years but may still lag the rapid population expansion in some areas:

• 65810 - Residential areas around Springfield like this zip have seen a huge influx of new residents from other parts of Missouri and outside the state.
• 65804 - Close to Missouri State University and its 20,000+ students, creating a constant pool of rental housing demand in this area.
• 65807 - Home to major employers like Prime Inc trucking, this zip is experiencing brisk apartment construction but likely not enough yet.

Other Areas of Note in Missouri

A few other Missouri areas exhibit interesting supply/demand dynamics for rental housing that investors should monitor:

• 64801 - The Columbia area home to the University of Missouri has seen double-digit rent growth amid limited new supply.
• 63366 - The City of Creve Coeur in St. Louis County has extremely high incomes but a lack of rental housing options.
• 65616 - Branson and surrounding areas in southwest Missouri have rental markets driven by tourism/seasonal demand.

Do you do cash out refi no seasoning for Missouri loans?

We do offer refinance options with no seasoning requirements. Here is the general criteria for cash out refi no seasoning for Missouri loans. Minimum loan amount has to be above $55,000. Minimum As-Is value on the appraisal has to be $100,000. Between 1-4 units. Must have an active lease with proof of security deposit collected. Property condition must be C4 or better. Minimum credit score of 680. Credit score between 680 to 699, gets maximum LTV of 70%, credit score of 700+ gets maximum LTV of 75%. Max LTC, 100% (less than 90 days seasoning), 140% (90 to 179 days seasoning). Minimum verified rehab, 20% of purchase price (less than 90 days seasoning), n/a (90+ days seasoning). Minimum verified rehab, is an improvement that has been done to the unit to verify increase in as-is value in such as short period of time (less then 90 days) to justify the no seasoning period. Origination fee of 1 to 2 points depending on the loan amount to keep the lights on. Lender fee, $1,995 (doesn't go to OfferMarket), includes multiple fees to several different 3rd party verification services, necessary to certify the information in the Loan File for closing. Appraisal at AMC market price, we also have a promotion that new clients get 100% of their appraisal refunded at closing and 50% refund for existing clients. Time to close, 20-25 days.

I know this is a lot of information. You don't have to lift a finger to calculate any of this to see if you qualify, all you have to do is answer 14 simple questions about your deal and we will tell you if we are a good fit for you and what kind of deal we can offer you. To get an answer on your specific situation, please answer 14 simple questions here in our online quoter for Missouri DSCR loans.

You can read more about our cash out refi no seasoning requirements or get started on your Missouri DSCR loan.

Can you lend on properties worth less then $100k?

In short, no, appraisal as is value must come in at above 100k. We can only lend on properties that are less then $100k if they are in a portfolio with other properties and the portfolio's total as-is value on the appraisal is above $250k. In order to qualify for our loans, the property must appraise for at least $100k as-is at the time of the appraisal, however, total loan amount may be less then 100k, minimum loan amount is $55k.

Do I need to have my property insured to qualify for funding?

Yes, but if you don't already have insurance, we can roll it into the lending process with no extra charge or effort to you. Our insurance team works with thousands of carriers and is intimately familiar with the insurance requirements of your loan. They will be able to ether talk to the agent of your choice or find the most competitive offer without our network of carriers to complement your loan with no extra effort or expense to you. If you already have insurance, you should get an instant quote to see if we can offer you a more competitive rate and save you thousands of dollars over the lifetime of your policy. Get you instant insurance quote here.

Why use Missouri DSCR Loans to buy investment properties?

DSCR (debt-service coverage ratio) loans can help real estate investors shorten their cash cycle and grow their rental portfolios more rapidly in a few key ways. First, the higher leverage and lower down payments allowed by DSCR loans mean investors can acquire more properties with the same amount of cash on hand, rather than tying it all up in larger down payments. Additionally, the option for interest-only payments creates more positive cash flow that can be reinvested into new property acquisitions. Finally, DSCR underwriting based solely on the rental income of the property itself, rather than the investor's personal income, enables investors to scale their portfolios more quickly without running into debt-to-income ratio restrictions.