Illinois DSCR Loans

Harpoon Capital's minimum credit score for a DSCR loan in Illinois is 600. Most DSCR lenders set the bar at 640, 660 or even 700, so a 600 floor opens the door for investors with a blemish on their credit. Have a recent foreclosure, short sale or bankruptcy? You may still have options, depending on how long ago it happened and your overall credit profile.

As little as 15% down. Harpoon Capital offers up to 85% loan-to-value (LTV) on qualifying Illinois purchases and rate-term refinances, using true DSCR qualification with no income documentation. Many investors put 20% to 25% down, and your exact down payment depends on your credit score, DSCR ratio and property type. Short-term rentals can reach 85% LTV too, using our hybrid option that supplements the property's income.

No. A DSCR loan qualifies primarily on the income the property generates, not your personal income. Harpoon Capital does not require tax returns, W-2s, pay stubs or employment verification, and your debt-to-income (DTI) ratio is never calculated. That makes DSCR financing a strong fit for self-employed investors, full-time investors and anyone whose tax returns understate what they actually earn.

The DSCR ratio is the property's monthly rent divided by its monthly PITIA (principal, interest, taxes, insurance and any HOA dues). A property renting for $2,400 with a $2,000 PITIA has a 1.20x DSCR. Most lenders require at least 1.00x, but Harpoon Capital has no minimum DSCR: ratios between 0.75x and 0.99x can still reach 80% LTV, and true "no-ratio" loans below 0.75x can reach 75% LTV. That flexibility helps in higher-priced Illinois markets where rent doesn't fully cover the payment yet.

Most DSCR loans carry a prepayment penalty, but you choose the structure. Common options include descending penalties like 5/4/3/2/1 or 3/2/1, flat fixed penalties like 5/5/5 that stay the same each year, and "Cali-style" penalties, which charge six months of interest only on amounts above the 20% of the balance you can prepay freely each year. You can also choose a shorter penalty or no prepayment penalty, with your rate priced to the option you pick. In Illinois, all of these structures are available when the loan closes in an LLC or other entity. Loans to individuals are limited to a maximum 3-year, 3/2/1 structure, with a no-prepay alternative offered in writing.

Usually 2 to 6 months of payments, and sometimes none at all. Most Harpoon Capital DSCR loans on Illinois properties call for 2 to 6 months of PITIA in liquid reserves, with up to 12 months on some larger loans. On loans up to $1.5 million, we offer an option that waives the reserve requirement completely. We can also count crypto, retirement and business accounts toward reserves.

Yes. Closing in an LLC, corporation, partnership or trust is standard on Harpoon Capital DSCR loans, and it's one of the biggest advantages over conventional financing. Every DSCR loan needs a guaranty, but we're flexible: in some cases a single guarantor owning as little as 20% of the LLC can sign, and non-recourse options are available even for majority owners. Many Illinois investors use an LLC to separate rentals from personal assets and for liability protection.

Most Harpoon Capital DSCR loans close in 15 to 30 days. Because there's no personal income to verify, timing mostly depends on the appraisal, title work and insurance. Illinois closings run through a title company, often with attorneys involved, especially around Chicago. Having your entity documents, insurance quote and lease or short-term rental projections ready speeds things up.

DSCR loan rates move with the market, so for today's pricing, check our current DSCR loan terms or request a free quote. Your actual rate depends on your credit score, LTV, DSCR ratio, loan size, property type and prepayment penalty choice. DSCR rates typically run higher than owner-occupied mortgages because they're business-purpose investor loans, but they come with no income documentation, LLC closings and no cap on the number of properties. A longer prepayment penalty, a lower LTV or a higher DSCR usually lowers your rate.

Yes. Short-term rentals are one of the most common uses for DSCR financing, and Harpoon Capital finances Airbnb and VRBO purchases and refinances in Illinois. We qualify the property on its short-term rental income rather than only a long-term rent estimate, which matters in vacation markets like Galena and Chicago. Medium-term rentals for travel nurses and corporate stays are eligible too.

Yes, at 100% of projected income. Most DSCR lenders cut short-term rental projections or require 12 months of booking history first, but Harpoon Capital can qualify your Illinois STR using 100% of projected revenue from AirDNA, the appraisal or other accepted sources. That means a brand-new Airbnb with no booking history can qualify on day one. If the property already has bookings, trailing 12-month actuals can be used instead.

No. Harpoon Capital does not require a short-term rental permit or license to close a DSCR loan in Illinois. You're still responsible for following local rules once you operate, and they vary widely. Illinois leaves STR rules to local governments: Chicago requires a city registration and bars units on its Prohibited Buildings List, and some suburbs, like Naperville, ban short-term rentals outright. Check zoning, HOA rules and any local registration before you buy.

For most investors, a DSCR loan is the better long-term fit. A second-home loan can offer 10% down, but it limits how you operate: rental use is generally capped at about 180 days a year, professional property managers usually aren't allowed and you can't close in an LLC. A DSCR loan is built for investment use, so you can rent year-round, hire a manager, hold title in an LLC and finance as many Illinois short-term rentals as you want, with down payments starting at 15% with Harpoon Capital.

Yes. Harpoon Capital finances warrantable and non-warrantable condos, as well as condotels, which many DSCR lenders won't touch. Condo loans usually require a questionnaire completed by the HOA, and the association's rental rules matter as much as the lender's: some Illinois buildings restrict or ban short-term rentals, so confirm the bylaws before you buy.

Yes. Harpoon Capital can finance the whole BRRRR cycle (Buy, Rehab, Rent, Refinance, Repeat) in Illinois: a fix-and-flip loan for the purchase and renovation, then a DSCR cash-out refinance once the property is rented or listed as a short-term rental. Our 80% LTV cash-outs, above the 75% cap most DSCR lenders use, and our no-seasoning options let you pull out more capital, sooner. It's a popular strategy in Illinois markets like Rockford and Peoria.

As soon as the rehab is done. Harpoon Capital offers true no-seasoning DSCR cash-out refinances, so you don't have to wait the 6 to 12 months many lenders require, plus additional programs that allow a cash-out after just 3 months of ownership. Getting to the refinance faster cuts the carrying costs on your rehab loan and lets Illinois investors recycle capital into the next deal.

The appraised value. Harpoon Capital bases BRRRR cash-out refinances on the property's current appraised value, including the value you added with the rehab, not just your purchase price, even on our no-seasoning and 3-month options. Many lenders cap you at purchase price plus documented rehab costs until you've owned the property for 6 to 12 months. You can borrow up to 80% LTV with no maximum cash-in-hand limit, and cash-out proceeds aren't taxable income.

Yes. Refinancing a hard money, bridge or fix-and-flip loan into a 30-year DSCR loan is one of the most common transactions we do in Illinois. To simply pay off the short-term loan, a rate-term refinance goes up to 85% LTV; to pull equity out, a cash-out refinance goes up to 80% LTV based on the appraised value. Vacant properties are eligible too, so you don't have to wait for a tenant. Have your rehab scope and receipts ready to support the appraisal.

No to both. You don't need to live in Illinois or have landlord experience. Harpoon Capital lends to out-of-state investors and offers programs for first-time investors, and even for first-time homebuyers who have never owned real estate before, including renters. Many Illinois investors live in another state and work with a local property manager.

Illinois is fairly balanced statewide. State law bars local rent control, and landlords can serve a 5-day notice for nonpayment. Chicago is the exception to watch: its Residential Landlord and Tenant Ordinance adds stricter rules on security deposits, notices and repairs, so many investors budget for professional management there.