"The sustained demand for rental properties, driven by a tight housing market and rising rents, has also fueled investor activity in real estate, making DSCR the preferred financing tool for these investments. Secondary investor appetite for non-QM RMBS is also growing, and we may see DSCR enter this market next year in a meaningful way, Halpern said. Max Slyusarchuk, CEO of AD Mortgage, said that the greater availability of DSCR products is tied to higher acceptance in the secondary market."
"The comfort in DSCR comes not from lenders, but from the final bond buyers and investors, he said. Lenders can produce whatever the markets will buy. Slyusarchuk added that two reasons have contributed to secondary market comfort. The first is that DSCR loans are easier to underwrite, and two, there are precise calculations for the underlying loan-to-value ratios. I think the uptick in 2025 came from just the realization that a lot of loans like that could be done, and we can underwrite them easier."
Sustained demand for rental properties, driven by a tight housing market and rising rents, has fueled investor activity and positioned DSCR as a preferred financing tool for rental real estate. Secondary investor appetite for non-QM RMBS is growing, and DSCR may enter that market meaningfully next year. Greater availability of DSCR products reflects higher acceptance in the secondary market, where final bond buyers provide underwriting comfort. DSCR loans are easier and faster to underwrite, feature precise loan-to-value calculations, require higher down payments and credit scores, and have delivered strong performance with delinquency similar to traditional underwriting.
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