What is a Business Purpose Loan

A Business Purpose loan is a loan made specifically for a Business Purposes and not a Consumer Purposes. Business Purpose loans are not subject to TRID. Business Purpose loans are typically made to seasoned Real Estate investors who use Non-Owner Occupied Residential properties (up to 4 Units) for collateral. Business Purpose loans are qualified on the Rents (cash Flow) of the property considering the property’s Debt Coverage Ratio or DCR.
Typically, the mortgage payment on the property will be covered by the rent received (DCR=1.00)