10/12/2026
The WSJ article title is a bit off. Debt Service Coverage Ratio mortgages for investors, isn't new but is reviving blighted neighborhoods in cities like Baltimore, Cleveland, Detroit, Indianapolis and Memphis. This is where the deals are for fix n' flip and buy n' hold investors.
But, there could be downside. Aside from fraud and foreclosure from easy paperwork/underwriting and aggressive valuation, homebuyer demand is typically low in distressed areas and property management isn't for everyone. Before you dig in, make sure you have a good property manager on speed dial, if you have to rent the property.
So, check out DSCR loans, invest with both eyes wide open and have a Plan B. Conservative rental projections will serve you well.
https://www.wsj.com/real-estate/new-mortgage-dscr-loan-d77ff640