A DSCR (Debt Service Coverage Ratio) loan is a type of investment property loan that qualifies borrowers based on the property’s income, not their personal income. Instead of relying on tax returns, W-2s, or employment history, we look at how much cash flow the property generates compared to the loan payment.

How it works:

• We calculate the property’s DSCR = Rental Income ÷ Debt Payments (principal, interest, taxes, insurance)

• A DSCR of 1.0 means the property breaks even

• A DSCR above 1.0 means the property generates positive cash flow
  

Why investors use DSCR loans:

• No personal income verification

• Faster and simpler approval process

• Scalable for building a rental portfolio

• Ideal for both long-term and (in some cases) short-term rentals

DSCR loans are designed for real estate investors who want to qualify based on the performance of the asset, not their personal finances.

The minimum loan amount is $75,000 for short-term loans and $100,000 for permanent DSCR financing.

The Academy Fund finances all short- and long-term real estate investment strategies, primarily for “single family” (1-4 units) and “smaller multifamily” (up to 10 units) projects. We also selectively finance larger multifamily, hospitality, commercial, and mixed-use projects.

On short-term projects (24 months or less), we can lend up to $10 million. For rental properties (permanent financing, up to 30 years), we can lend up to $3 million on a single-family home, and up to $5 million for 2-4 unit homes (duplexes, triplexes and quadplexes) or multifamily projects (up to 10 units).

For “fix-and-flip” and new construction projects, we can lend the lesser of 90% of cost (land + improvements) – and perhaps more on selected projects – or 70% of the “after repair value.” On permanent (30-year) financing for rental properties, we can lend up to 80% of appraised value for acquisitions, and up to 75% (or more, based on certain circumstances) of appraised value for “cashout” or “rate & term” refinancings.

We can close within 5-7 business days, contingent upon timely receipt of due diligence items from the borrower, title work and appraisal completion.

Yes, we offer pre-approvals and “financing support” letters. However, such pre-approvals are not a guarantee of lending and are always subject to satisfactory diligence and final underwriting approval.

Yes, all loans of this nature require a personal guarantee from each owner of the borrowing entity.

We only offer “business purpose loans” to “business purpose entities” (i.e. LLCs, corporations, and partnerships). If a property is directly owned by one or more individuals, it can easily be transferred into a business purpose entity at closing.

For short-term (bridge, rehab or new construction) loans, an internal valuation is conducted at origination. Depending on various factors such as property type, project scope, borrower experience, and market conditions, we may waive an external appraisal or broker's price opinion (“BPO”) to expedite closing, but may obtain the appraisal post-transaction. Appraisals are always required for long-term (30-year) loans on rental properties (1-4 unit “single family” or multifamily).