DSCR & Investment Loan Expert Curriculum

Jermaine Fields · NMLS #2067609 · NEXA Lending · CA & MO Licensed

6-Phase Mastery Plan
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1

Foundation — What Is Investment Lending?

Core vocabulary, property types, and the QM vs. non-QM landscape

Week 1–2
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Before you can sell a product you need to understand the ecosystem. This phase is the vocabulary and mental model layer — it makes every subsequent conversation with a borrower or lender click into place.
Core Vocabulary to Master

📐 Loan Math

  • LTV / CLTV / HCLTV
  • DSCR ratio formula
  • Cap rate & cash-on-cash return
  • NOI (Net Operating Income)
  • PITIA (principal, interest, taxes, insurance, association dues)
  • Gross rent vs. net rent vs. market rent
  • Debt yield

🏘 Property Types

  • SFR (1-unit) investment
  • 2–4 unit residential investment
  • 5+ unit multifamily (commercial)
  • Short-term rental (STR/Airbnb)
  • Long-term rental (LTR)
  • Mixed-use
  • Commercial (office, retail, industrial)
  • Ground-up construction

⚖️ QM vs. Non-QM

  • What makes a loan "Qualified" (CFPB rules)
  • Why investors can't use conventional income
  • ATR (Ability to Repay) rule
  • Non-QM legal framework
  • Who buys non-QM paper (private label MBS)
  • Agency vs. non-agency

💼 Investor Strategies

  • BRRRR (Buy, Rehab, Rent, Refi, Repeat)
  • Buy & hold LTR
  • Short-term rental (STR)
  • Fix & flip
  • Portfolio building
  • 1031 exchange (tax awareness — don't advise)
  • LLC / entity titling
DSCR = Monthly Gross Rent ÷ PITIA
Key insight: A DSCR of 1.0 means the property exactly covers its own payment. Lenders typically want 1.20–1.25+. A DSCR below 1.0 is "no-ratio" — some lenders still do it at lower LTV.
Phase 1 Checklist
2

DSCR Loans — Deep Dive

Your primary product — master every variation before anything else

Week 2–3
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DSCR is your niche and your highest-value product. Know it better than any other LO in the room. Every lender has a slightly different program — your edge is knowing which lender fits which scenario.
DSCR Loan Variations

🏠 Standard DSCR (LTR)

  • 1.0–1.25+ DSCR requirement
  • Typical LTV: 70–80% purchase, 65–75% refi
  • Qualification: property cash flow only
  • 1007 rent schedule (SFR) or 1025 (2–4 unit)
  • No income docs, no employment verification
  • 30-yr fixed, ARM, interest-only options
  • Min loan amount typically $100K–$150K

🏖 Short-Term Rental (STR) DSCR

  • AirDNA or Rabbu for projected income
  • Some lenders use 12-month STR history
  • Some use blended (STR + market rent)
  • Higher LTV risk = stricter DSCR requirements
  • Lenders that do STR: Kiavi, A&D, Angel Oak
  • Zoning/HOA issues can kill deals — check first

📊 No-Ratio DSCR

  • DSCR below 1.0 (property doesn't cash-flow)
  • Lender compensates with lower LTV (60–65%)
  • Higher rate / more points
  • Common in high-cost markets (LA, SF, NYC)
  • Borrower must show liquid reserves
  • Not all lenders offer — know who does

🏢 Multifamily DSCR (5+ Units)

  • Shifts from residential to commercial underwriting
  • Actual rent roll vs. projected rents
  • Vacancy factor applied (typically 5–10%)
  • Operating expenses factored into NOI
  • DSCR = NOI ÷ Annual Debt Service
  • Lenders: CoreVest, Arbor, Ready Capital

🏗 BRRRR Exit Loan

  • Refinance out of hard money after rehab
  • Seasoning requirements: 3–12 months
  • Delayed financing exception (some lenders)
  • As-is vs. after-repair value (ARV)
  • Cash-out refi to pull equity for next deal
  • Title seasoning often required (6–12 months)

🏛 LLC / Entity DSCR

  • Many investors prefer LLC ownership
  • Most DSCR lenders allow LLC titling
  • Personal guarantee still required (most lenders)
  • Non-recourse available (larger loans)
  • Operating agreement + EIN required
  • Single-member vs. multi-member LLC treatment
DSCR Calculation Scenarios

Scenario A — Strong Cash-Flow

  • Purchase: $350,000 · LTV: 75% · Loan: $262,500
  • Rate 7.5% 30-yr → PITIA: ~$2,050/mo
  • Market rent (1007): $2,600/mo
  • DSCR: 2,600 ÷ 2,050 = 1.27 ✓

Scenario B — No-Ratio (LA)

  • Purchase: $850,000 · LTV: 65% · Loan: $552,500
  • Rate 8.0% 30-yr → PITIA: ~$4,400/mo
  • Market rent: $3,800/mo
  • DSCR: 3,800 ÷ 4,400 = 0.86 — no-ratio lender needed
Key DSCR Lender Matrix
LenderMin DSCRMax LTVSTR?Notes
A&D Mortgage0.7580%YesVery flexible, wide product menu, Jermaine's likely primary
Kiavi1.080%YesStrong for LTR & STR, fast closes
Visio Lending1.075%YesSpecialist DSCR lender, investor-focused
Lima One Capital1.075%LimitedAlso does fix & flip, bridge
Angel Oak1.080%YesNon-QM specialist, broad menu
Deephaven1.080%YesWholesale-focused, strong pricing
CoreVest (Pretium)1.1575%NoPortfolio & blanket loans, institutional
RCN Capital1.080%LimitedAlso fix & flip, bridge
Phase 2 Checklist
3

The Full Non-QM Toolkit

Bank statement, P&L, asset depletion, 1099, foreign national, ITIN

Week 3–4
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Not every investor wants a DSCR loan. Self-employed borrowers, foreign nationals, and high-net-worth clients with complex income need other non-QM tools. Knowing these makes you a full-service non-QM LO.

🏦 Bank Statement Loans

  • 12 or 24 months personal or business bank statements
  • Business: expense ratio applied (typically 40–50%)
  • Personal: deposits used as income
  • Self-employed 2+ years required
  • No tax returns — key for write-off-heavy borrowers
  • LTV up to 85–90% (primary), 75–80% (investment)

📋 P&L Loans

  • CPA-prepared P&L statement (12–24 months)
  • Business owner only — must own 25%+ of business
  • Faster than bank statement for clean businesses
  • Lender may require CPA letter + business license
  • Some lenders accept accountant-prepared (non-CPA)

💰 Asset Depletion / Asset Qualifier

  • High net worth with little reportable income
  • Formula: liquid assets ÷ loan term = monthly income
  • Retirement accounts at 60–70% of value
  • Stocks, bonds, cash all count
  • Down payment assets excluded from calculation
  • No employment or income history required

📄 1099 / Wage Earner Non-QM

  • Gig workers, contractors, real estate agents
  • 24 months of 1099s used instead of W-2/tax returns
  • No Schedule C deductions taken against income
  • Simple income calculation vs. conventional
  • Strong alternative for W-2 earners with side income

🌐 Foreign National Loans

  • Non-US citizens buying investment property in USA
  • No SSN required — passport + visa documentation
  • Max LTV typically 65–70%
  • Higher down payment, higher rates
  • ITIN vs. non-ITIN foreign nationals
  • Big opportunity in LA — international buyer market
  • Lenders: A&D, Angel Oak, Civic Financial

🪪 ITIN Loans

  • Individual Taxpayer ID (not SSN)
  • Typically for undocumented or non-resident borrowers
  • Primary residence focus (not always investment)
  • Requires 2+ years of ITIN tax filing history
  • Max LTV 80–85% with full doc
  • Strong niche in CA (large immigrant investor market)
When to Use Which Product — Quick Decision Tree
  • Investment property, qualifies on rent? → DSCR loan
  • Self-employed, lots of write-offs, investment property? → Bank statement DSCR or bank statement purchase
  • High net worth, no income, large assets? → Asset depletion
  • Gig worker / contractor, clean 1099s? → 1099 loan
  • Non-US citizen buying in LA? → Foreign national loan
  • Files taxes with ITIN (not SSN)? → ITIN loan program
Phase 3 Checklist
4

Short-Term / Bridge / Fix-and-Flip

Hard money, bridge loans, construction — the velocity capital products

Week 4–5
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These are the entry point for many investors — they need capital fast to acquire and rehab. You won't necessarily originate these at NEXA (most hard money is lender-direct), but understanding them makes you the LO who knows the full investor journey and can capture the long-term DSCR refi.

🔨 Fix & Flip Loans

  • Short-term (6–18 months), interest only
  • Funds purchase + renovation (draw schedule)
  • Underwritten on ARV (After Repair Value)
  • LTV: typically 70–75% of ARV
  • Rates: 9–13% + 2–4 points
  • Fast close: 5–10 business days
  • Exit strategy is the sell or refi — NOT hold

🌉 Bridge Loans

  • Short-term funding between transactions
  • Stabilized bridge: property already rented
  • Value-add bridge: light rehab, then stabilize
  • Typical term: 12–24 months
  • Interest only during bridge period
  • Exit: sell, refi to DSCR, or refi to commercial perm
  • Used heavily in BRRRR step 1

🏗 Ground-Up Construction

  • Loan funds land + construction draws
  • GC / licensed contractor required
  • Inspection required before each draw
  • LTC (Loan-to-Cost) vs. LTV on completed value
  • Interest only on drawn amounts
  • Exit: sell (spec) or DSCR refi (hold)
  • Harder to place — fewer lenders, more complexity

📦 Portfolio / Blanket Loans

  • Multiple properties under one loan
  • DSCR underwritten on combined portfolio NOI
  • Cross-collateralization — one loan secures all
  • Partial release clause (sell one, retain others)
  • Strong for investors with 5+ properties
  • Lenders: CoreVest, Arbor, Civic Financial
  • Minimum portfolio typically $1M+
Your role in fix & flip: You likely won't close hard money at NEXA. But when that investor's refi is ready, YOU want to be their DSCR LO. Plant the seed during the flip — build the relationship early, close the long-term rental refi when they stabilize.
Phase 4 Checklist
5

Pricing, Rates & Lender Matching

How investment loans are priced and how to find the best execution

Week 5–6
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Investment loans don't have a Freddie Mac rate sheet. Pricing is dynamic, lender-specific, and driven by scenario factors. Understanding the pricing levers makes you dangerous — you can quote with confidence and know when a lender is beating the market.

💹 Pricing Levers (DSCR)

  • LTV (biggest driver — 60% vs 80% = 50+ bps)
  • DSCR ratio (below 1.0 = add-on)
  • Loan amount (loans under $150K often hit add-ons)
  • Property type (SFR vs condo vs 2-4 vs mixed-use)
  • Credit score (740+ for best pricing)
  • Prepayment penalty term (longer = lower rate)
  • IO vs. fully amortizing (IO usually costs more)
  • Short-term rental add-on
  • LLC vs. individual borrower

📅 Prepayment Penalty Structures

  • 3/2/1 — 3% yr1, 2% yr2, 1% yr3, then free
  • 5/4/3/2/1 — step-down over 5 years
  • 5-year flat — fixed % for 5 years
  • Yield maintenance — rare on DSCR
  • Longer step-down = lower rate (tradeoff)
  • Investors who plan to sell want no/short PPP
  • BRRRR investors want short PPP (refi exit)

🎯 Rate vs. Points Tradeoff

  • Origination points buy down the rate
  • 1 point = 1% of loan amount
  • Use break-even analysis for borrower
  • Example: 1 pt ($3,000) saves $30/mo → 100 months to break even
  • Long-hold investors: buy the rate down
  • Short-hold / flip: minimize points

🔄 ARM vs. Fixed on Investment

  • 30-yr fixed: stability, highest rate
  • 5/1 ARM: lower start rate, resets at year 5
  • 7/1 ARM: popular for BRRRR (refi before 7 yrs)
  • Interest-only: max cash flow during IO period
  • 40-yr amortization (IO first 10 yrs): some lenders offer
  • Investor who plans 5-yr hold → ARM makes sense
Lender Access at NEXA — How to Pull Pricing
  • Lending Pad (your LOS) — NEXA's primary platform; AE contacts are in the system
  • Optimal Blue / MORTECH — pricing engines for some lenders
  • Call the AE directly — for non-QM/DSCR, AE relationships matter more than the system. Build your AE list in your first 30 days.
  • Scenario desk — most DSCR lenders have a scenario team; use them to pre-qualify deals before taking an app
Phase 5 Checklist
6

Client Conversations & Deal Structuring

Turn product knowledge into closings — how to talk to investors

Week 6–8
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Product knowledge is table stakes. What separates a top investment LO is the ability to think like the investor, structure the deal to their goals, and communicate it clearly. This is where your Colony Capital background is a genuine edge — you've been in the room where institutional credit decisions are made.

🤝 The Investor Intake Conversation

  • What's your investment strategy? (buy/hold, BRRRR, flip)
  • Property type and market?
  • How many properties do you own? (portfolio context)
  • Cash-out or rate/term?
  • Hold period?
  • Entity or personal title?
  • What's your timeline to close?
  • What's your credit score? (rough)

📐 Structuring a DSCR Deal

  • Pull the 1007/1025 market rent
  • Calculate DSCR at target LTV
  • Compare: 70%, 75%, 80% LTV scenarios
  • Show rate/payment at each LTV
  • Identify best lender for scenario
  • Address PPP (how long are they holding?)
  • Present IO vs. fully amortizing

❓ Objections to Know

  • "The rate is too high" → Compare to cap rate; cash flow is the metric, not rate alone
  • "Hard money is easier" → No underwriting isn't free — point out rate + LTV tradeoff
  • "My tax returns show a loss" → That's exactly why DSCR exists
  • "I want a conventional loan" → Investment property max LTV is 75–80% anyway
  • "I need to close in 10 days" → Some DSCR lenders close in 2 weeks

🏦 Reserves & Eligibility

  • Most DSCR lenders require 6–12 months PITIA in reserves
  • Reserves can be in stocks, retirement (at haircut), cash
  • Gift funds typically not allowed on investment
  • Bankruptcy/foreclosure seasoning: typically 2–4 years
  • Prior DSCR experience? Some lenders prefer it
  • Max financed properties varies by lender
Your Competitive Edge — Colony Capital Background
You hosted credit committee meetings for institutional investors at Colony Capital — the same orbit as CoreVest (one of the largest DSCR lenders in the country). When you talk to a sophisticated investor, you're not a salesperson — you're someone who's seen these deals from the other side of the table. Lead with that.

Proof-of-knowledge phrases: "When I was at Colony AMC, the deals that got approved all shared one characteristic..." / "Institutional lenders look at debt yield, not just DSCR — here's why that matters for your deal..."
Your CA & MO Market Edge

🌴 California (LA Focus)

  • High property values → larger loans → more comp
  • No-ratio DSCR common (rents don't cover PITIA)
  • STR market (Venice, Santa Monica, Malibu)
  • Foreign national buyers (Pacific Rim investors)
  • LLC titling standard practice
  • Keywords: investment property loan LA, no income mortgage California

🌾 Missouri (KC Focus)

  • Strong cash-flow market — DSCR above 1.25 common
  • BRRRR capital of the US — huge investor community
  • Lower loan amounts → need volume
  • BiggerPockets community is KC-heavy
  • Target: KC metro investors doing BRRRR
  • Keywords: DSCR loan Kansas City, BRRRR loan Missouri
Phase 6 Checklist

DSCR Mastery Test

Test your knowledge before your first investor call

30 Questions · 6 Phases

30 multiple-choice questions covering all 6 phases of the curriculum. Covers DSCR math, underwriting, loan products, sales objections, and advanced scenarios.

Resources to Study