DSCR, ARMs, and Program Flexibility — What’s Working Now

In a mid-6% rate environment, creativity matters. Standard 30-year fixed loans are still the most common path, but buyers and investors are increasingly turning to program flexibility to achieve their goals.

1. DSCR Loans for Investors.

Debt Service Coverage Ratio loans qualify borrowers based on rental income instead of personal tax returns. For investors, that flexibility can unlock doors that traditional underwriting closes. It’s especially valuable in competitive rental markets.

2. Adjustable-Rate Mortgages (ARMs).

Products like 5/1 or 7/1 ARMs often price lower than 30-year fixed loans. For buyers who plan to sell or refinance within that timeframe, the savings can be meaningful. With rates unlikely to plummet overnight, ARMs offer short- to medium-term relief.

3. Lender-Paid Buydowns.

Temporary buydowns remain a go-to solution for easing into payments. The first year’s comfort helps buyers adjust without relying on seller credits.

4. Self-Employed Bank Statement Loans.

Entrepreneurs often show less taxable income than their actual cash flow. Bank statement programs — using 12–24 months of deposits — solve that gap and keep businesses moving forward.

The takeaway: programs are tools, not tricks. In 2025, the clients who explore options beyond the traditional fixed loan are the ones unlocking opportunities.