Cynthia, thanks for the post here and congratulations on have an excellent problem! You are well on your way to being a real estate mogul.
Now, just in case (and just in case others read this too), you can have 10 loans will Fannie/Freddie PER PERSON. So, if a spouse qualifies for a mortgage on their own, they can also have 10 loans in their name too. You can also go beyond 10 when buying your own personal home.
Is it there much of an advantage to get Fannie/Freddie loans? I mean, there are advantages, but PLENTY of investors don't even use their money and they are just fine.
Here is what I would say you need to know about DSCR loans in general:
DSCR loans are usually easier to get. They don't need your paystubs. No tax returns. There's not even a "debt-to-income" ratio with DSCR loans. The main point to them is that they use the income of the property. You still need good credit (and reserves) but for income, it's the income of the property that is used for the loan - not YOUR income. Which is why a lot of full time investors, who might write all their income off, love using a DSCR loan. It's easier to get.
I want to define reserves for a moment. Reserves are monies that you do not bring to closing but you show that you have "in reserve" incase the property isn't rented for a couple of months or if there is a repair, then you have assets that could cover that need. You show this money in your bank account before closing and then after closing, nobody cares. Meaning, no lender will audit your bank account later type of thing. I will say though, that ANY financial planner/advisor would recommend that you keep 3-6 months of your bills in reserve anyway. So, it's good practice to have this. Oh, and it's 6 months of the mortgage payment for the subject property is all that is required. Not 6 months for ALL properties...just for the subject property.
The main drawback to DSCR loans is the prepayment penalty (PPP) that they have. And you don't HAVE to have a PPP but it makes your rate lower. It's pretty common to have a 3 year PPP. I have seen 5 year....that seems kind of long to me...and have given out plenty with 1 year PPP or 2 year PPP due to the plans of the borrower. But RARELY would I recommend having NO PPP. It makes the rate a little to high....but you can certainly get one that way if you needed it.
Most of the other items are pretty standard - yes, you still need an appraisal. Yes, you still need reasonable credit. Yes, the property needs to have the rehab complete. All the things we are used to on other loans.
Hope some of this helps but feel free to ask anything additional. Thanks!
