HomeBridge is pleased to announce the addition of the Investor Cash Flow (ICF) option to the Simple Access program effective with new submissions on or after August 17, 2018.
The Investor Cash Flow option provides unique opportunity for borrowers purchasing or refinancing investment properties; the borrower is qualified using only the rental income from the subject investment property.
The IFC option requires at least one borrower to have a documented 12 month history of managing rental properties (history is not required to be in the most recent 3 years).
Key features of the Investor Cash Flow option include:
- 1-4 unit investment properties only
- SFR, PUDs, and condos (warrantable and non-warrantable) eligible
- DTI not considered; qualification is based on the debt service coverage ratio (DSCR) of the subject property. A DSCR of ≥ 1 is required
- The DSCR is calculated as follows:
- The subject property gross rent divided by the subject property PITIA equals the DSCR
Example 1: Gross rent: $2,000; PITIA: $1750; $2,000/$1750 = 1.142 DSCR (acceptable)
Example 2: Gross rent: $800; PITIA: $1,000; $800/$1000 = 0.8 DSCR (unacceptable)
- Rents are determined using 100% of the lesser of the current rent or market rent as determined by the appraiser. Copies of leases must be provided when applicable.
- Employment and income are not verified
- ICF transactions are considered “business purpose