DSCR Loan For 1031 Exchange in Dayton Now

The Investor’s Advantage: Leveraging a DSCR Loan to Power Your 1031 Exchange

DAYTON, OHIO – AUGUST 25, 2025: For serious real estate investors, mastering the 1031 exchange is key to compounding wealth while deferring taxes. But tight timelines—45 days to identify and 180 days to close—can make traditional financing a major roadblock. The solution? DSCR (Debt Service Coverage Ratio) loans—a fast, flexible funding option built for investors.

This guide breaks down exactly how to use a DSCR loan for your 1031 exchange replacement property, giving you the knowledge and tools to stay ahead in today’s competitive market.

DSCR Loan to Power Your 1031 Exchange:

Why DSCR Loans Are Transforming 1031 Exchanges

Traditional loans rely on W-2s, tax returns, and personal financial scrutiny—slowing you down when speed matters most. A DSCR loan, on the other hand, is based on property income, not personal income. Approval hinges on one metric:

DSCR = Rental Income ÷ Debt Obligations

A DSCR of 1.20+ typically qualifies, meaning your property’s cash flow is strong enough to cover its debt. This property-focused approach eliminates bottlenecks, making DSCR loans ideal for time-sensitive 1031 transactions.

Key Benefits:

• No personal income documentation required.
• Faster, simpler approval process.
• Works perfectly for LLC-held properties.
• Keeps your exchange on schedule—avoiding costly capital gains taxes.

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

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Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

Page 2 of 3

If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

Page 3 of 3

Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

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DSCR Loan Rates & Requirements (August 25, 2025)

Rates: Currently 6.25%–8.50% for 30-year fixed DSCR loans, depending on:

• Loan-to-Value (LTV): Higher down payments = better rates.
• DSCR Strength: Stronger property cash flow earns lower pricing.
• Credit Score: 700+ helps but isn’t a dealbreaker.
• Property Type: Single-family, multi-family, and short-term rentals all eligible.

Core Requirements:

• Property-Based Approval: No W-2s, no tax returns.
• Entity Structure: Typically requires LLC ownership.
• Versatile Property Types: Works for long-term rentals, multi-units, and vacation rentals.

Why GHC Funding Is the Smart Investor’s Choice

GHC Funding isn’t just another lender—they’re an investment-focused partner. They understand the urgency of 1031 exchanges and deliver:

• Streamlined closings to meet strict IRS deadlines.
• Flexible underwriting centered on your investment, not your personal income.
• A full suite of solutions beyond DSCR: SBA 7a, SBA 504, Bridge Loans, and more.
• Expertise navigating complex investment scenarios nationwide.

The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

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Page 1 of 5

What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

Page 2 of 5

How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

Page 3 of 5

What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

Page 4 of 5

Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

Page 5 of 5

Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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Dayton, Ohio: A Market Ripe for Opportunity

The Dayton metro area is a hidden gem for investors, backed by a stable economy led by Wright-Patterson Air Force Base and a growing tech and healthcare presence. Consider these high-potential markets:

• Downtown Dayton (45402): Revitalized urban core with strong multi-family demand.
• Beavercreek (45431): Family-friendly suburb with top-rated schools and high rental absorption.
• Oakwood (45409): Upscale community ideal for premium single-family rentals.
• Kettering (45429): Balanced market offering steady long-term returns.

FAQs: DSCR Loans & 1031 Exchanges

Can I use a DSCR loan for my primary residence?
No, they are exclusively for investment properties.

What if my DSCR is below 1.20?
You may still qualify with a lower LTV or higher reserves.

Can I refinance existing properties with DSCR loans?
Absolutely—ideal for cash-out refinancing to fund new acquisitions.

Do I need an LLC?
Yes, most lenders require investment properties to be held in a business entity.

How fast can I close?
Typically 2–4 weeks, far quicker than conventional loans.

Are multi-family and vacation rentals eligible?
Yes—properties with strong rental income perform well with DSCR underwriting.

Is this a good option for first-time investors?
Yes, especially if you have a cash-flowing property but limited personal income documentation.

Resources for Dayton Investors

• Greater Dayton Real Estate Investors Association (GDREIA) – Local networking and market intel.
• Ohio Division of Real Estate & Professional Licensing – Regulatory guidance.
• Dayton Housing Market Data (Redfin) – Up-to-date pricing and trends.
• St. Louis Fed – Dayton Housing Price Index – Long-term price performance.

Secure Your Next 1031 Success

Don’t let traditional financing jeopardize your exchange. Use a DSCR loan to move quickly, protect your gains, and grow your portfolio with confidence.

Call 833-572-4327 or visit GHC Funding to learn how they can make your next 1031 exchange your smoothest and most profitable yet.

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GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

At GHC Funding, we are commercial finance specialists who guide real estate investors and business owners through the world of alternative lending. Our primary focus is on securing the right capital for your specific goals, whether that's a cash-flow-based DSCR loan for your rental portfolio, an SBA loan to grow your company, or a bridge loan to close a deal quickly and efficiently.

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