It's common for real estate investors to secure mortgages via an LLC because it protects their personal assets from liability.
However, since conventional mortgages don’t allow for property purchases through an LLC, investors usually turn to specialized LLC mortgage options.
One of these options is DSCR loans, which we find to be the best option for most borrowers. Unlike other mortgage products, DSCR loans aren't assessed based on the borrower's financial profile (e.g., debt-to-income ratio, income level, or employment history), and don’t require income verification or tax returns.
Instead, the loan is entirely based on the rental property's ability to pay its monthly debt obligations (mortgage payments, insurance, and taxes) with its rental income.
For example, if a property earns $1,200 in rental income and its debt obligations total $1,000, its DSCR is 1.2. This ratio is the primary factor that lenders consider.
Generally speaking, a DSCR above 1.0 is considered "good" by most lenders because it means the property can settle all debt obligations on its own. However, lenders like Constitution Lending can issue loans to properties with a DSCR as low as 0.75.
That said, the exact lender you use to finance your purchase matters. Some lenders can reliably close within 7 to 14 days (enabling you to match the speed of cash buyers) while others take 40+ days to close. Here are two ways you can predict a lender's closing speed:
- How quickly can they issue quotes, term sheets, and loan approval? We've learned that if it takes longer than 24 hours for a lender to give you a quote, term sheet, and approval letter, they are unlikely to achieve 7 to 14-day closing times.
- Are they a direct lender or a broker? Brokers simply connect you to a lender, so they won't know if you qualify until after the lender has finished underwriting. If there’s a problem the broker overlooked, it can cause complications right before closing. With direct lenders, they lend you their own money, so they can immediately tell if you qualify.
This article covers the five best DSCR lenders based on the criteria mentioned above.
We start by discussing Constitution Lending and how we close faster and more reliably than most lenders.
We then review additional options on the market, including RCN Capital, Lima One Capital, Stratton Equities, and Griffin Funding, allowing you to assess their closing practices and loan terms independently.
You can use our automated pricer to generate instant quotes and play around with different loan scenarios.
1. Constitution Lending: Highest LTV, Fastest Closing LLC Mortgage Loans
Constitution Lending is a direct hard money lender that provides borrowers with loan options to purchase investment properties through an LLC.
We founded Constitution Lending after being real estate investors ourselves for over a decade and dealing with slow, unreliable lenders. These lenders would take 40+ days to close after saying they could close within 14 days. Additionally, they would sometimes reject our application a day before the closing date. We founded Constitution Lending to solve these problems.
Here’s what borrowers say about our lending process:
Let’s discuss how we reliably close loans within 7 to 14 days.
We Can Close Loans Within 7 to 14 Days
Nearly all investment property lenders promise fast closing. However, in our experience, they fail to deliver on this promise due to inefficient application processes.
Namely, borrowers must wait multiple business days for a loan officer to contact them and another few days for a quote, term sheet, and approval letter before they can even submit their documents.
Constitution Lending speeds up these initial steps with our automated pricer. Borrowers can generate instant quotes and price out multiple loan scenarios without waiting for a call from a loan officer.
Once borrowers have generated a quote, we immediately send them a term sheet and loan approval letter, including access to our documents portal, where they can submit all the necessary paperwork at once.
With most lenders, this initial stage of the application process would take 5 to 7 days. With Constitution Lending, it takes less than an hour.
Here’s a summary of the entire application and lending process:
- You enter details such as the property’s purchase price, the loan amount, and the estimated rental income into our automated pricer. You’ll receive three quotes that look like this.
- We recommend playing around with these variables to understand how each affects your loan options.
- If you’re satisfied with one of the three quotes, click on it and type in your full name and email address.
- We’ll send you a term sheet and loan approval letter immediately and a link to our documents portal where you can submit business entity documents, proof of insurance, purchase contracts, and bank statements. We’ll review your documents and give you a final answer regarding your eligibility.
- Our documents portal keeps you updated regarding the progress of your loan application. Additionally, you can use the chat feature to reach out to our team with any questions you may have.
- We’ll underwrite your loan and close with the title company.
This efficient lending process has allowed us to close within 7 to 14 days, sometimes even within 4 days.
We Are Direct Lenders Funding Your Loan with Our Own Capital
We are direct lenders, meaning you're working with the financiers of your loan and not a broker who is simply an intermediary between you and another lender.
Since it's our capital, we set our own lending requirements. This means we don’t need to send your application to another lender and wait a week for them to underwrite it before giving you a final answer. The benefit of this is that we can tell if you qualify immediately after you submit documents. We won't come back to you with a rejection letter the day before closing.
With brokers, there’s always a risk that your loan can fall through right before closing because they can’t determine your qualification themselves (since they aren’t lending you their own money). They must pass your application to the lender for underwriting, which often takes weeks. If the lender discovers something that disqualifies you, it can lead to your loan being rejected at the last minute.
Secure Quick DSCR Loans with Constitution Lending
Constitution Lending has issued over $200 million worth of investment property loans since 2018. We’ve helped hundreds of borrowers (first-time and experienced investors) beat cash buyers to good deals by closing quickly and reliably.
You can see what interest rates and loan terms you qualify for by generating an instant quote with our automated pricer.
2. RCN Capital
RCN Capital is a hard money lender that offers various loan products for purchasing investment properties through a limited liability company. These include 30-year DSCR loans that require no income verification. Additionally, if investors already own properties they’d like to place into an LLC, they can utilize RCN’s portfolio loans.
Requirements and Additional Information
- DSCR loans can be used to purchase 1 to 4-unit real estate, condos, and townhomes.
- Loan amounts range from $55K to $2M.
- A property’s cash flow must be 1.05 greater than its debt obligations to qualify.
- Borrowers can qualify for a maximum LTV of 80% (i.e., the minimum down payment is 20%).
- Borrowers can do a maximum cash-out refinance of 75% of the property’s value.
- The minimum FICO score is 660.
How to Apply
To apply, create a borrower account on the RCN website and complete one of the application forms. A loan officer will then contact you.
3. Lima One Capital
Lima One Capital is a private money lender for borrowers looking to expand their portfolios, whether by buying a 30-year rental through a legal entity or placing properties they already own under an LLC.
Lima One offers various loan products, including long-term DSCR loans, short-term DSCR loans for Airbnb properties, bridge loans, and fix and flip loans that you can use to purchase properties through your LLC.
Requirements and Additional Information
- Lima One offers five-year, 10-year, and 30-year LLC loans.
- Loans can be used to purchase 1 to 4-unit properties.
- Loan amounts range from $75K to $2.5M.
- Flexible terms and interest-only options are available.
- No personal income verification is needed when applying.
- Homebuyers can qualify for loans with no prepayment penalty.
- A minimum FICO score of 670 is required.
How to Apply
To apply, fill out an application form on the Lima One website, specifying the loan you want to apply for. A loan officer will then call you to discuss your needs and provide a quote.
4. Stratton Equities
Stratton Equities positions itself as a hard money and non-QM mortgage lender for real estate investors nationwide. It offers a range of loan products, including no-income-verification rental loans that can be used to purchase properties through an LLC.
Borrowers can use Stratton Equities’ financing options to purchase properties in all U.S. states except Nevada, North Dakota, South Dakota, and Vermont.
Requirements and Additional Information
- Loans can be used to buy single-family homes, condos, townhomes, multi-family homes, commercial real estate and mixed-use properties.
- Loan amounts range from $100K to $5M.
- Business owners can qualify for loans with a maximum LTV of 80%.
- Fixed and adjustable mortgage rates are available.
- There’s no personal credit score requirement.
- Rental loans are available without prepayment penalties.
How to Apply
To apply for a real estate investing loan with Stratton Equities, complete the application form on their website, and a loan officer will contact you.
5. Griffin Funding
Griffin Funding is a mortgage and home loan lender that offers loan programs for real estate investors looking to purchase properties and hold them within an LLC. Griffin Funding operates in over 25 U.S. states, including California, Florida, Texas, and Nevada, but currently doesn’t lend in North Dakota, South Dakota, and Alaska.
In addition to LLC mortgage loans like DSCR loans, Griffin Funding also provides fix-and-flip loans, asset-based loans, bank account loans, FHA loans, home equity loans, and bridge loans.
Requirements and Additional Information
- A minimum DSCR of 0.75 is required.
- A minimum business credit score of 620 is required.
- First-time real estate investors are eligible.
- Fixed-rate and variable-rate options are available.
- A personal guarantee is required.
- Loan amounts range from $100K to $20M.
- Griffin Funding doesn’t require a business plan.
How to Apply
To apply for an LLC mortgage loan or any type of loan, complete the contact form on Griffin Funding’s website. A loan officer will call you within a few days.
Get Started
To get started with Constitution Lending, you can use our automated loan pricer to generate multiple quotes in seconds.
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