DSCR Loans: From Your First Rental to a Growing Portfolio

Hey, Art, uh, we have talked about a lot of different mortgage programs here for experienced investors with 10 or 20 properties. It could potentially help somebody buy their very first rental property. So let's start with the basics. What exactly is a DSCR loan and why has it become such a popular financing tool for real estate investors, Art?

Sure, Jeff. Uh, I think this is a great topic to talk about. Um, so yeah, let's start with the basics. DSCR stands for debt service coverage ratio, but the concept actually is pretty simple. You know, with a traditional mortgage, we're primarily asking the borrower, you know, do you have enough qualifying personal income to make the mortgage payment? Now, a DSCR loan is entirely different. Instead, we're primarily asking, does the investment property generate enough rental income to support the mortgage payment. That's a critical difference. And in fact, that's why we call a DSCR loan a low-doc loan program. Um, you know, instead of, you know, how we typically qualify, uh, someone who's, uh, where we're using their personal income, we have to get W-2s and pay stubs and tax returns. And again, we're looking at the income-producing ability of the borrower. But with the DSCR loan, we don't collect any of that documentation. We're instead looking at the income-producing ability of the property. And see, that can be very helpful with real estate investors or self-employed people, uh, because those borrowers' tax returns may not necessarily reflect their true financial strength, and it can be problematic. And of course, it's going to be a lot of work if we're dealing with a real estate investor who may have many, many properties. You know, the amount of work involved in the documentation to be provided is pretty extensive. So here's the distinction I would want everyone to remember: the DSCR doesn't eliminate underwriting. That, you know, we don't want to imply that it's like one of these no-look type loans that we were doing before the great crash. It changes the way we're underwriting. So that's the key distinction to understand. We're putting more emphasis on the investment property and the income that it generates.

So, so, Art, when people hear no traditional income qualification, I mean, that doesn't mean anybody just automatically qualifies, does it?

No, exactly right. We're still looking at the borrower's credit, in particular their credit score, their assets, meaning their money in the bank, Uh, reserves. In other words, how much money are you going to have left over after you complete the transaction? Because these type of programs do require that you don't wipe yourself out in terms of your cash, that you have money left over. And we're going to look at the property. We're simply qualifying the borrower in a different way.

So, okay, so let's make this real simple. How do you actually calculate a DSCR, and what does something like that DSCR actually mean?

Okay.

Yeah.

Let me give you an easy example to follow. Let's suppose a property has $3,000 per month in qualifying rental income and the qualifying monthly housing expense is $2,500. We simply divide that $3,000 by the $2,500 and we get a result that is 1.20. That's called a DSCR ratio.

Hmm.

So in plain English, what that means is the property's generating $1.20 in rental income for every dollar of qualifying housing expense. If we have a DSCR ratio, for example, that's at 1.0, that means basically that the qualifying rental income essentially equals the housing expense for the loan amount requested. That's a break-even, and that is sort of the magic threshold you want to try to get to with the DSCR loan is try to get at least 1.0 or better. But however, I do want to point out, uh, below 1.0 doesn't necessarily mean the deal is dead. You can still potentially get the loan. Some DSCR programs will allow the ratio to fall below 1.0. Most will allow it down to 0.75. Which of course that means the property right out, you know, out of the gate is going to be, you know, have negative cash flow. Uh, some programs though, some lenders will allow this, but what happens is it may require— in fact, it probably will require more money down, stronger credit, in other words higher credit scores, additional reserves, you know, more money in the bank, particularly after the deal's closed. And of course, the pricing is going to be different, meaning you're probably going to look at a little bit higher rate. So don't look at a property and decide for yourself if you don't qualify. Give us the numbers, let us run the DSCR ratio for you to determine, you know, your, your ability to qualify.

So a 1.0, that ratio isn't necessarily a pass or fail number, is that what you're saying?

Exactly. Different DSCR lenders have different guidelines. Now, most of them are pretty close, but there are some differences out there, and that's our job as a mortgage broker to, you know, be aware of those so that we can apply them in the right situation. So that's one of the advantages of working with a mortgage broker like us, where we have access to multiple DSCR programs and lenders.

Well, for— if we're not qualifying somebody on traditional employment income, What documentation is actually needed then, Art, to make this come together?

Good question, and this is actually one of the most, uh, I think one of the biggest attractions, uh, of the DSCR financing option. Uh, typically we're not documenting personal income the same way we would with a conventional conforming loan. Uh, what that's going to mean is no W-2s, no pay stubs, no personal or corporate tax returns for income qualification. And in fact, on an application for DSCR loan, we don't even put in employment information. The whole employment, uh, section of the application is blank. Of course, what that implies is you can be— you don't have to have a job to be eligible for one of these programs. And instead, we're going to look again, as I mentioned earlier, we're going to look at credit, particularly credit score, assets, how much money you have in the bank, You know, in particular, how much do you have in the bank to complete the transaction based on the down payment requirement for the loan? Do you have enough cash left over to meet required reserves? And of course, the appraisal, where the appraisal is going to include an addendum for market rent. So the appraisal report will identify the market rent for the property based on a traditional 12-month lease, and that will be used as the you know, market rent to calculate the ratio. Now, if the property is already tenant occupied, then we will use the existing lease agreement for that calculation. So again, no traditional documentation, income documentation, is required, but that doesn't mean it's a no documentation or no underwriting type of loan. That's not what we mean here. It means we're simply evaluating the transaction differently. And that can be particularly valuable for self-employed borrower or an investor with complicated tax returns.

So, so somebody, somebody can have a successful business or investment portfolio but still have difficulty qualifying conventionally because of what's showing on their tax returns?

Correct. You know, as is, you know, very often the case with a self-employed borrower, whether we're talking about a DSCR loan or not, You know, their tax return— they may be running a successful business, but their tax return may show that net income amount is reported very low because they're trying to avoid income tax. Uh, same with real estate investors. All of their properties are going to be on a Schedule E, and there's going to be, you know, income shown and expenses deducted. And depending on how they were reporting those properties from year to year, the amount of available income could be pretty low to qualify for a traditional loan. So in that respect, uh, there's 3 things to note. First, don't automatically assume a DSCR loan requires 25 or 30% down. Depending on the lender, your credit profile, the property, the DSCR ratio, some programs can potentially go as high as 85% loan-to-value, meaning just 15% down. Second, depending on the program, the property can potentially be owned through an LLC or some other business entity. And that's pretty important, particularly for real estate investors as a way to protect their assets. So it's very popular with real estate investors, that ability to hold title to the property in something other than their personal name. And then third, and this is pretty important. Mm-hmm. You have to be aware of the fact that DSCR loans commonly have prepayment penalties, and those options range from 0 to 5 years. So generally, accepting a longer prepayment period gives us the access to the best pricing, the best rate on the loan. As we shorten that period or eliminate the prepayment penalty altogether, the rate or pricing generally increases. You're going to look at a higher rate. So we're not simply asking what's the lowest rate. Uh, what we're going to be asking is what's your plan for the property?

Well, let's talk about the actual loan. How much does someone need to put down? Can I purchase through, as you say, an LLC? And are there any special loan terms I should know about?

Well, a couple things. Um, what— because one of the things we try to look at is we want to understand what their purpose is for buying that investment property. And we got to take into account a few things. Uh, maybe they're planning to improve the property, increase the rent, and then refinance in a couple years. Or maybe they expect to sell. Or if you're planning to hold the property for 10 years, you know, a 5-year prepayment penalty may make perfect sense, especially if you've got a DSCR ratio where you break even or better. Then That means the property is generating enough income to cover your housing expense. And if you're going to get the best rate with a 5-year prepayment penalty and you're a long-term investor, you have no intention of selling that property or refinancing anytime soon, that 5-year penalty could be very helpful in getting the best terms on the loan. Now, if you're planning to refinance or sell in 2 years, then not so much, right? So the lowest rate isn't necessarily the best loan. The best loan is the one structured around the investor's strategy.

Well, is that why, you know, maybe, uh, somebody would deliberately take a higher rate to get a shorter prepayment penalty, as an example?

Yes, exactly right. If you, you know, and I've done some— in fact, frankly, I just closed one, um, where the borrower was pretty focused on wanting to get a DSCR loan. Um, she had plenty of liquid assets. She was not employed. Um, and, uh, the loan-to-value was good, the credit score was good, but she only wanted a 1-year prepayment penalty. In this case, it was a cash-out refinance, and a major part of getting the cash out was to refurbish the property with the intent to sell somewhere in the next 1 to 3 years. So for that particular borrower, Knowing what her strategy was with the property, it made sense to push that prepayment penalty down to just 1 year. Of course, the trade-off was the rate was higher, but in her case, the property was tenant occupied, and the amount of monthly rent she was receiving was, uh, covered the housing expense for the loan amount she desired. So it was a break-even. And so that way the rate becomes less of an issue because the property's cash flowing even at that rate, and she has that ability with only a 1-year prepayment penalty to have those options afterwards. And after that 1 year, maybe rates come down and she decides to keep the property longer, she can refinance, or then otherwise she's free to then sell the property and not incur the penalty because it's already expired.

Well, do I already have to be an experienced real estate investor to use a DSCR financing, or could somebody watching, uh, us use this to buy their very first rental property?

Well, that's probably, probably one of the most important things I would want people watching today to understand. You don't have to necessarily be an experienced investor. There are DSCR programs for people purchasing your very first investment property. That is an option. Now, maybe you already own a primary residence home that you're living in. and you've been thinking about buying a rental, uh, there may be a DSCR option for you. And even if you're currently a renter— so you don't— you're not a homeowner, you're currently a renter, and you've never owned real estate, so you're even— you're renting and you're a first-time homebuyer— there are programs that may consider that situation, although the requirement— the requirements can be more restrictive and lender guidelines do vary considerably. And not all lenders will lend to a borrower who is both a first-time home buyer, meaning they don't own a home or haven't owned a home in the last 3 years, and a first-time investor as well. So when you've got those 2 parameters with the borrower profile, the universe of lenders who will make that loan is reduced. And again, you're going to be seeing adjustments in the guidelines in terms of higher credit scores needed Higher down payment needed, and maybe higher cash reserves. So that's what that's the important point to make is don't assume a DSCR is only for somebody who already owns you know ten rental properties. That's not the case. Every successful real estate investor had to purchase property number one before they got to property number ten, right? So the point is there are people out there who are in that position, and they want to become a real estate investor. This could be a very good program as a kind of a lifting off point to get into that strategy, uh, over the long term.

So somebody, uh, somebody watching has, uh, always thought, hey, someday I'd like to own a rental property. You want to talk to them, right?

Absolutely. Yeah.

Well, you know, one of the things are— and I just want to kind of hit you right on this— is You said something that I never thought of a DSCR loan is, hey, I'm a renter and I'm thinking about buying a property that someday I may live in, but this is my first— I'm a first-time buyer and I do the DSCR. Yeah, maybe a little more expensive, but the qualifications may be such that makes perfect sense for me to move forward with that.

Well, exactly right. I mean, that, that's, that's a good point. Now again, uh, as a first— as a renter and a first-time home buyer and you're trying to do this, Uh, we do have options available. They're not as plentiful as somebody who already owns a home or already owns their primary home and a rental property. But the point is, I don't want folks who are just renting, maybe never owned a home, to think this could not be a potential option for them. It could be. What we're trying to do is we're trying to accomplish how much have you made, how much do you have available for the investment, and what type of property are you considering. So we need to know that. Then we'll determine whether or not the DSR DSCR financing makes sense for them.

Well, I think this is very interesting. Like I said from the very beginning, we talked a lot about a lot of different mortgage tools over the time on The Mortgage Minute, but this one, this one really opens up some, some doors into areas that probably the average investor and certainly first-time home buyer would never think of.

Exactly right. See, this is where, you know, DSCR financing has become very popular as a portfolio building tool. And as investors acquire more property, conventional financing can become increasingly complicated because we're looking— continually looking at their personal tax returns and debts and number of properties and so forth. So the DSCR completely changes the conversation, right? With every new opportunity, we're asking, what will this property rent for? What, what's the mortgage payment going to be for the loan amount you want? What's the DSCR ratio that's going to result? Does the investment make sense based on doing those calculations? Now, some DSCR programs don't require or impose the same limitations on the number of financed properties that you can own, which you can run into a problem with conventional financing because some of those limit how many properties you can own. And there's another major advantage with us, uh, that people may not realize. Although MortgageWorks is licensed for residential, you know, loans in California, with this particular product, this DSCR, which is considered a business purpose loan because you're buying a rental property, an investment property, it's not for, you know, primary occupancy. So as a consequence, even though we're only licensed in California, we can offer this financing option in 36 states.

Oh wow, okay.

Throughout the country. And so that means an investor that we're talking to doesn't necessarily have to invest in California for us to be able to help them. And of course, I have the list of states. I pass that out to borrowers who are looking to, you know, buy investment property out of state. So the point is, you know, you might find an attractive rental property in Arizona or Tennessee or Florida or some other market that we can serve on that 36, you know, state list. So that means potentially we can help somebody go from their very first rental property to a geographically diversified investment portfolio. They may not necessarily be limited to California only. And in years past, before this DSCR program became available, I occasionally do get folks asking, hey, do you lend out of state? And sometimes it has been because they were buying rental property, if not just moving out of state.

Wow.

So with this DSCR program, we have that option to help folks with out-of-state home purchases, or if they already have existing rental property out of state, uh, then we can use this program and, you know, provide them a refinance, whether it's to lower the rate or to pull cash out.

Well, I think that's— I, I think that's very, very important because, as you say, this is something that's not been available forever. And I know personally as a real estate investor that I did bump up to a couple of things that you talked about, is Well, I could only have so many properties before that particular mortgage, uh, tool would say, oh, you can't have any more in your name.

Right.

And, and then we had to start doing things like putting in an LLC. But it sounds like the DSCR has already taken that and, and taken into account. So if we want to take it to the next level and say, hey, I want to own more, maybe I already own 1 or 2 rental properties. But how can DSCR financing help me grow to a larger portfolio? Because let's be honest, 1 or 2 rental properties is not, is not the end game for most people.

Well, exactly right. And the beauty of the DSCR loan is, as you maybe are looking to purchase another property to add to your portfolio, unlike a conventional conforming loan where we're qualifying you based on your personal income stream, We don't have to worry about what your other existing rental properties are doing in terms of, you know, cash flow. Um, you know, is it positive or is it, you know, a negative, uh, rental income situation? Uh, we don't have to worry about that because we're not calculating a traditional debt-to-income ratio. We're— again, the focus of the DSCR is we're not focusing on the borrower and their personal income. We're focusing on the subject property that they're looking to purchase, and does that subject property generate enough rental income to offset or cover the housing expense for the for the loan amount that they desire? So as a consequence, if you have three or four or five you know other rental properties, and maybe they're not cash flowing very well, it's a non-issue because we're not going to take in those other properties into account when we're calculating your qualifying ratio, which in this case is a DSCR ratio. Not a debt-to-income ratio.

So, you know, one of the things that I always enjoyed, and I think most of us do, is, is to have a relationship with whether it's our insurance agent, in this case our mortgage company. So if somebody who's worked with MortgageWorks here in California, uh, they could call you about, hey, I have investment properties, and they're considering another state, I, I— to me, that adds a tremendous amount of comfort And you said there's how many of those states that you can deal with?

36.

Wow. That covers a lot.

Like the one we, uh, the one we just closed a couple weeks ago was in, uh, in South Carolina, uh, in a town called Bluffton, not far from Myrtle Beach.

You know, one of the things I loved about, about this is the fact that, you know, there are times, and you've seen it in your 4 and a half decades in the business, is there are times where, you know what, it's really not a good market to invest in here in California. And sometimes it's best to go out of market, and that's where the deals are. I mean, I've seen it in the Midwest. We've bought stuff in Mississippi or Florida or whatever because the market is changing. It sounds like this really opens up the door for people to be able to do that.

Well, exactly. In fact, I have a— I'm thinking, as you describe that, I'm thinking of a past client. I've done many loans for them here in California. This is where they live, and they own other property. not just their primary home, they have a rental property in the area and so forth. But they, uh, they actually decided to pursue, uh, purchasing rental property, investment property in Texas.

Mm-hmm.

Because in that market, what they found was the price levels were relatively moderate, but the, the rental income potential was sufficient enough that they could easily acquire another rental property, again using the DSCR approach. And for them, it really cuts down all the documentation because again, we're not qualifying them based on their personal income. So even though, you know, both people, you know, married couple, both working, and they've got, you know, multiple properties in California, I got to tell you, the amount of work that is saved by not having to go through all the documentation and employment verification and tax returns and pay stubs and W-2s, all that goes away. And because they determined that maybe their investment strategy for rental property in California, the numbers weren't working so well, that's when they were compelled to seek out other states and look where the, you know, the combination of the property values and, uh, you know, what kind of loan amount they're going to need to purchase and, you know, what kind of rental income is going to be generated, it works very well. And so, yeah. It's becoming more common to see, you know, folks who live here maybe have a rental property or 2 here. Uh, some of them are starting to realize to expand their portfolio, don't limit themselves to just California, start looking out of state. Because in some states, the numbers work really well and at relatively modest purchase price levels, which of course helps you with only having— not having to have as much of a down payment in total dollars. You know, you amount of down payment you need for a $250,000 home that may be in Texas, and whereas a comparable home in California might be $600,000, well gee, just a 10 or 20, you know, 15, 20% down, your down payment in dollars is going to be a lot less.

Well, okay, so kind of wrapping up here, uh, first of all, tell me before I ask this last question, is again, what does DSCR stand for?

Debt Service Coverage Ratio.

And it's really all about the property and what it rents for.

What does a property generate in rental income? What is going to be the monthly housing expense for the loan amount you want? Keeping in mind that's principal and interest, or in some cases interest only, because some of these DSCRs help, uh, offer interest-only loans, which by the way can help with that ratio. Because if you have a lower, you know, interest, you know, P&I, in this case it's only I, that helps lower the total housing expense to help you better able to meet the ratio of 1 or better. So the housing expense, you know, principal and interest or interest only, taxes and insurance and HOA dues if applicable— if that housing expense number for the loan amount you want is equal to or below what the rental income that that property is going to generate, then you're going to have a nice DSCR ratio of 1 or better. And that's going to help you get the best terms. And again, we don't have to worry about qualifying on debt-to-income ratio or any other, you know, tax returns and bank statements and even your employment. Again, you don't have to be employed to be able to get this type of program.

That's beautiful. So, so what's the, what's the biggest mistake somebody could make after watching today's show, Art?

I think the biggest mistake is folks who decide on their own that they don't qualify.

Hmm.

And of course, I run into that problem not even just with folks who want to be real estate investors, even regular borrowers who just want to buy a primary home. It's amazing how many folks out there just assume they don't qualify. So in all cases, I encourage people, uh, to, you know, rethink that. Now, maybe you're self-employed, maybe you've never— you know, maybe your tax returns don't show enough qualifying income, maybe you've never owned an investment property. Maybe you already own several rentals and conventional financing is becoming more difficult, or maybe you found an investment property out of California and assume that we can't help you. Don't make those assumptions. Don't make the underwriting decision yourself is the key point.

Mm-hmm.

Give us a call. Tell us about the property, what we're trying to accomplish, and what your long-term strategy is. And then we'll run the numbers, we'll calculate the DSCR for you, and we'll determine what financing option is going to be available for you. Because whether you're looking for the rental property number 1 or rental property number 10, our job is to help you find out what's possible. Now I want to, as we finish up here, I want to point out one word of caution about the DSCR product. Uh, because this has become a little bit of an issue in the mortgage industry, uh, and that's the concept of occupancy fraud.

Hmm.

So what do I mean by that? Well, some buyers out there, some people want to buy a home, have, you know, try to go the conventional route where, again, we're going to qualify you based on your personal income and employment status and all that, and we're going to collect all that documentation that we've been talking about. And then you realize you don't qualify. You don't meet the debt-to-income requirement, uh, or ratio that is, you know, key to the ability to repay rules when you're qualifying for a conforming conventional loan. Uh, what we're finding is that some buyers, and I think, you know, along with maybe their agents, look at this DSCR loan— oh, here's a way we can circumvent Conforming conventional qualifying guidelines, you know, full doc of your income, meeting a debt ratio. And hey, why don't we use this DSCR program? We have the down payment money that's necessary. Let's say we're going to pursue this home and we're going to say we're buying it as a rental property. Use the DSCR to get qualified because the rental property income is sufficient to meet the housing expense. And then once they close, they're not going to rent it out, they're going to move into it. That's a no-no. And I would urge anybody who's listening, if you've even— if that thought's even occurred to you, don't, don't do it. Uh, the industry is catching on. This is something that is really being focused on, on new originations of DSCR loans, is looking for signals in that loan package that would suggest to the lender that these folks aren't really serious about being, you know, real estate investors or owning a rental property. They're using this program to circumvent the other, you know, personal income qualifying rules for conforming conventional loan. So I just want everyone to know that that is not something you want to think about or do, because, uh, chances are in most cases you're going to be discovered. And you don't want that to happen because depending on where you're at and if you go all the way to the point of acquiring the property and you've moved in, uh, you could have some trouble in the— in your future.

So you might have different housing.

Well, exactly right. But, you know, I've heard some stories already about lenders, uh, who've closed a DSCR loan and they end up, uh, scheduling a, uh, an occupancy inspection where they actually literally send somebody to your door, knocks on it, find out is there a tenant inside or the original borrower. And again, that, that can be really problematic. And in the closing, in the closing documents, Buried in those documents, there are provisions that basically tell the borrower that those are options a lender can pursue. So you want to be serious about using this program. It's not as— it's not a program to circumvent regular conforming guidelines and qualification criteria. It's for real estate investors or people who want to become real estate investors. That's what this is for, and you should keep that in mind.

So just, just one little quick question on it, just clarification. Let's say, let's say, um, I find a duplex or a multi-unit property. Can I live in one, or do they all have to be rented?

They all have to be rented.

Okay, so I can't occupy half and, you know, and rent one? Okay, that makes sense.

The loan category for this type of loan is going to be in the investment property category, because remember, in mortgage financing, there's 3 main categories as to what we call called disposition of the property. Primary home. Second, also slash known as vacation home, where you use the property part of the year but, uh, otherwise it's not occupied. Although these days second homes have become a little bit of a variant from that, where you live in it part of the time, usually on vacation, and then the rest of the time you might rent it out on short-term rental basis. So that's the second slash vacation home disposition or investment property dispositions, one of those 3. And for DSCR, you have to be an investment property category. It cannot be primary residence. So yeah, on a 2 to 4 unit, uh, you still have to look at it as all units are going to be rented out.

I love it. Well, I think this, this basically says, hey, there's a, there's a nice big door open for people who want to be real estate investors.

Yeah.

And again, my biggest takeaway from this, because again, I did invest in multi-states, would be to say, hey, I just have to call Art one time no matter where I'm at, as long as there's no 36 states, and he already knows me, knows what I'm doing, and vice versa. It makes the relationship so good. So I've got your number on there, 760-969-5023, or to email you at art@mwloan.com. And, uh, Really check that out. Hey, Art, before I let you go, you know the last last couple weeks we've been kind of in and out from a from a live and and then also our avatars have been jumping in there, which I think they've done a nice job. Give us on a closing just give us an overview of things like hey how how's the ten-year treasure because I feel a little odd. I was looking today. I'm like dadgummit! There was a dip yesterday. That was that Wednesday dip for. looking for. What are some of the signals out there?

Well, this week in particular, uh, economic data points, by the way, pretty light. Uh, the real kind of significant, uh, data that's come out this week is, of course, the Case-Shiller, uh, Home Price Index. Uh, that actually— that index showed a 1.5% annual, uh, growth in property values, although also pointing out that the real, uh, property value is actually a decline because what, you know, what you have to take into account there is what's the inflation rate versus that 1.5% increase in value. So that's one issue, uh, on a— after inflation is kicked in, we've got a small negative, uh, you know, value or a small decline in, in real value after you take into account inflation. Um, other than that, new home sales were down. by like 6% from in July over June.

Wow.

So, you know, home builders are definitely feeling the pain a little bit in terms of more inventory standing and having a harder time getting some homes sold. And of course, the other— the only other item is, you know, the PCE, the Personal Consumption Expenditure Index, the Fed's favorite inflation target, came out yesterday. And it helped the market in a sense because It was basically came in as projected, and it was considered, you know, a relatively cool number. So that was good news. So with that, you know, the 10-year— what I'll tell you about the 10-year bond is, again, remember I mentioned, I think last week, you know, it tends to go and kind of get into a range that it stays at for a period of time. Right now, the range is between about 4.60 and 4.70. I think last I checked, it was like 4.66. And that was enough to give us a little bit of improvement in rates. If anyone wants to go to our website, we've got the rate grid right on, on the homepage. And the rates we're showing now are about an 8th of a percent below what they were last week. A conforming conventional 30-year with a good credit score, good down payment, you're looking at about 6.375%. Um, and so don't let the media fool you, because on the media I still see, you know, 4.5— or not 4.5, 6.5, 6.7. Uh, we can get you a better deal than that. And yeah, here you go. You can see it's 4.674, and I think we're going to be there for a while. And I've said it over and over again, we need to get the, you know, international events resolved. We need, you know, oil prices down, back down below $80 a barrel. And we can get to those points, then I can— I think we can see some improvement. But until then, I think we're going to be stuck in these levels for a while.

Yeah, I just want to pull your, uh, your site up just real quick, just let everybody know that, uh, there's your, your information. I, I still think— is it, is it still safe to say, Art, that the, uh, temporary buydown is still in play?

Absolutely. In fact, I would say even more so than ever. Uh, inventory has grown. We're seeing on the new home side their sales have slowed. I can tell you Talking to realtors all the time, of course, they're all kind of moaning and groaning. We don't have enough buyers out there. There's more inventory. Sellers are, I think, more willing to negotiate and offer some concessions. I think that the conditions are perfect really for buyers who have who now have leverage to negotiate some pretty good outcomes. In fact, we're closing one here next week. With another example of, I was approached, they found a property, I brought up the idea of get your concessions and, and, you know, dollar credit from the seller. And sure enough, we're going to be closing that deal with a 2-1 temporary buydown with money left over to cover a majority of their closing costs. So those— that example is out there. It's available. Homebuyers who are on the fence, or prospective homebuyers on the fence, Get with a real estate professional, figure out what your strategy is, and then give us a call and I can give you some numbers to help you form your strategy to make an offer.

I think that's great. Well, Art, I'll let you go, but that was a great show. I love the whole thing about the DCSR.

DSCR.

Oh, excuse me, DSCR. It makes so much sense for investors. And for those people looking to do this, 760-969-5023, or get ahold of Art at art@mwalone.com. Art, in the meantime, thank you so much. We'll see you next week.

All right, thanks, Jeff. Thank you everyone for watching and listening to this week's Mortgage Minute. Appreciate your time and attention to learn more about the DSCR loan product. It really is a great product for either real estate investors who want to add to their portfolio, or maybe they need to do some refinancing with their existing portfolio. And as we just discussed, if you own a home but you want to get into owning residential real estate, rental real estate, the DSCR program is a great option to consider. Uh, be happy to have a discussion with you about what your strategy is. Give me a call, I'll interview you to figure out again what your parameters are, what your strategy is, and then I can give you some numbers to help, you know, put that strategy in place and get you in a position to make an offer. So with that, that concludes this week's Mortgage Minute. Again, Art Alvarez with MortgageWorks, where we have, where we have the answers and they're on the house. Have a great weekend. Things are cooling down finally after a pretty good heat wave here in Southern California. So we'll see you again next week on another edition of Mortgage Minute. So long, take care.