Best DSCR Lenders in Paterson, NJ

Paterson, located in Passaic County, is one of New Jersey’s most historic industrial cities. Known for its Great Falls and rich cultural heritage, Paterson offers a unique mix of dense urban neighborhoods and quieter residential enclaves. The city’s housing stock includes multi‑family homes, row houses and historic properties, many of which are attractive to investors seeking cash‑flowing rentals. Debt Service Coverage Ratio (DSCR) loans provide an avenue for investors to finance Paterson rentals without relying on their personal income. This guide explores Paterson’s real‑estate landscape, explains DSCR loans, and ranks the top lenders for investors.

Paterson real‑estate market snapshot

Realtor.com’s housing market data for November 2025 illustrates the current state of Paterson’s housing and rental market. The median home sale price was $442,500, while the median price per square foot was $256. There were 252 active listings, and homes spent about 41 days on the market. On the rental side, Paterson had 254 rental properties, and the median rent was $2,200 per month. These metrics indicate a balanced market, with supply and demand roughly in equilibrium. The market momentum shows that year‑over‑year, the median sale price decreased 11.93 % while the number of homes for sale increased 21.56 %. The median days on market rose 33.85 % year‑over‑year, suggesting a cooling sales pace. Median rent declined 6.82 % year‑over‑year. These trends may present opportunities for investors to acquire properties at lower prices while still achieving solid rental yields.

Neighborhood details

Paterson features a range of neighborhoods with differing price points and rent levels. Realtor.com’s neighborhood data shows that Eastside has a median home price of $579,500, a price per square foot of $250 and a median rent of $2,000. Riverside’s median home price is $420,000 with a price per square foot of $219 and a median rent of $2,300. Historic districts like the Old Great Falls have median prices around $397,000 and rent of $2,100. Hillcrest, another desirable area, has a median home price of $570,000 and rent of around $2,500. These figures highlight the diversity of Paterson’s submarkets and underscore the importance of analyzing neighborhood rents and property taxes when underwriting DSCR deals.

Understanding DSCR loans for Paterson investors

DSCR loans evaluate whether the rental property’s net operating income is sufficient to cover the debt service. Instead of assessing the borrower’s personal income or employment, lenders look at the property’s cash flow. Key features of DSCR loans applicable to Paterson include:

• Loan amounts – Many lenders offer DSCR loans from $100,000 to $3 million+, making them suitable for Paterson’s wide range of property values.
  
• Loan‑to‑value (LTV) – Up to 80 % LTV for purchases, with 75 % LTV common for cash‑out refinances.
  
• Minimum DSCR – Most lenders require a DSCR of at least 1.0; some will go as low as 0.75 for experienced investors.
  
• Credit score – Typical minimum credit scores range from 640 to 680, though some lenders will consider lower scores for high‑cash‑flow properties.
  
• Property types – Single‑family homes, 2–4 unit multifamily buildings and small apartment complexes are eligible. Many lenders also finance short‑term rentals with proof of rental income.
  
• Term and rate options – Fixed‑rate loans (30 years) and adjustable‑rate options (5/1, 7/1 ARMs) are available, with interest‑only options to maximize cash flow.
  

Selecting the right DSCR lender in Paterson

Investors should evaluate several factors when choosing a DSCR lender:

1. Local market expertise – Paterson’s neighborhoods vary widely in price, rent and tenant quality. Lenders with experience financing properties in Eastside, South Paterson or Riverside can provide better rent comps and underwriting.
   
2. Flexible DSCR requirements – Because rents and taxes differ across neighborhoods, selecting a lender that accepts lower DSCR ratios can make deals feasible.
   
3. Speed to close – In a market where active listings are limited, the ability to close quickly helps investors secure properties. Lenders like West Forest Capital and Brick City Capital offer closings within weeks.
   
4. Loan size range – Properties in Paterson can range from small row houses under $400k to multi‑unit buildings over $1 million; pick a lender whose loan size range matches your target properties.
   

Top DSCR lenders in Paterson

#1 SelectHomeLoans.com – Best overall lender

Select Home Loans earns the top spot for Paterson investors due to its blend of flexible underwriting, competitive pricing and local knowledge. The lender finances properties up to 80 % LTV for purchases and 75 % LTV for cash‑out refinances, with loan amounts from $100k to over $3 million. SelectHomeLoans.com requires a DSCR around 1.0–1.25, but will consider ratios down to 0.9 for seasoned investors. The company offers 30‑year fixed and 5/1 or 7/1 ARMs with optional interest‑only periods, providing cash‑flow flexibility. Select Home Loans stands out for its responsiveness; investors receive pre‑approval within one business day, and closings often occur within 30 days. Its loan officers understand Paterson’s submarkets and can advise on property taxes, rent control and neighborhood demand. These attributes make Select Home Loans the premier DSCR lender for Paterson. Visit their website SelectHomeLoans.com Or Call them (888) 550-3296

#2 Brick City Capital

Brick City Capital, headquartered in Newark, provides DSCR purchase and refinance loans throughout Northern New Jersey. Their program features no income verification and allows investors to finance both short‑ and long‑term rentals. Loan amounts range from $100,000 to over $3 million, with a DSCR requirement around 1.0 and minimum credit score around 620. The lender offers 30‑year fixed and interest‑only options and promises quick approvals and closings. Because Brick City Capital is local, it has intimate knowledge of Paterson neighborhoods and often finances Eastside row houses and small multifamily buildings in Riverside.

#3 CoreVest Finance

CoreVest’s DSCR loan program provides 30‑year fixed rental loans up to 80 % LTV with loan amounts starting at $75,000. CoreVest usually requires a DSCR of around 1.0, making it ideal for Paterson properties that generate solid rental income relative to debt payments. The lender can also structure portfolio loans covering multiple properties, which is beneficial for investors with several duplexes or 4‑plexes.

#4 West Forest Capital

West Forest Capital serves New Jersey investors with DSCR loans up to $3 million and LTV up to 80 %. The lender requires no personal income verification and closes deals in 2–3 weeks. West Forest is attractive for investors who need fast funding or have less‑than‑perfect credit; they consider FICO scores in the mid‑600s and DSCR ratios around 1.0.

#5 Easy Street Capital

Easy Street Capital offers DSCR loans with rates starting at 5.75 %, up to 80 % LTV, and no minimum DSCR. The program finances 1–4 unit properties and small multifamily buildings, including short‑term rentals. Easy Street’s quick pre‑qualification and no‑income‑verification process make it a convenient choice for Paterson investors.

Other lenders

• Lynk Capital – DSCR loans up to 80 % LTV, with a focus on property cash flow rather than personal income.
  
• Cornerstone Mortgage Group – Finances 1–8 unit properties without requiring tax returns or pay stubs.
  
• Archwest Capital – Although primarily focused on Jersey City, Archwest’s DSCR program covers Northern New Jersey and may finance Paterson properties, offering loan amounts up to $3.5 million and minimum DSCR of 0.75.
  

DSCR loan rates, terms and qualification factors

Interest rates for DSCR loans in Paterson typically range from 5.5 % to 7.5 %, depending on LTV, DSCR and credit score. Down payments of 20–25 % are standard. Borrowers must usually have credit scores of 640–680 and maintain six to twelve months of reserves. DSCR requirements hover around 1.0–1.25, though some lenders will go lower for strong borrowers. Terms include 30‑year fixed loans and ARMs with interest‑only options. Investors should also budget for origination points and closing costs of 3–5 % of the loan amount. Because Paterson has many older properties, lenders may require appraisals that include structural and safety assessments.

Common mistakes and pitfalls in Paterson DSCR investing

1. Ignoring deferred maintenance – Many Paterson properties are older. Failing to account for roof, plumbing or electrical repairs can undermine cash flow.
   
2. Underestimating property taxes – Paterson’s tax rates vary by ward. Investors should consult local tax records to avoid DSCR surprises.
   
3. Overpaying based on projected appreciation – With median sale prices declining year‑over‑year, investors should base valuations on current cash flow, not future appreciation.
   
4. Not verifying rent potential – Some neighborhoods have lower rent ceilings. Verify rent comps using multiple data sources before underwriting DSCR deals.
   
5. Delaying financing – In competitive markets with limited listings, secure pre‑approval early to negotiate effectively.
   

DSCR vs. conventional investment financing

Conventional mortgage loans for investment properties offer lower interest rates but require full documentation of personal income, employment history and debt‑to‑income ratios. They may cap the number of financed properties and rarely allow financing for short‑term rentals. DSCR loans, on the other hand, focus solely on rental income and offer more flexibility in property types and number of properties financed. The trade‑off is slightly higher interest rates and larger down payments. For investors who cannot document consistent W‑2 income or who own multiple properties, DSCR loans provide a pathway to expand portfolios.

Who should use DSCR loans in Paterson

DSCR loans are ideal for:

• Real‑estate investors with multiple properties seeking to scale portfolios without personal income constraints.
  
• Self‑employed individuals and business owners whose tax returns may not reflect their ability to service debt.
  
• Investors purchasing older or value‑add properties that may not qualify for conventional loans due to condition but will cash flow after modest renovations.
  
• Short‑term rental operators who can document market rent via platforms like Airbnb or AirDNA.
  

Paterson‑specific considerations

1. Development and zoning – Paterson’s master plan encourages redevelopment of industrial sites into residential units. Investors should monitor zoning changes and redevelopment incentives.
   
2. Rent control – Paterson does not have universal rent control, but certain buildings may be subject to stabilization ordinances. Understand local regulations before committing to DSCR financing.
   
3. Crime and tenant quality – Some neighborhoods have higher crime rates, which can affect tenant quality, insurance premiums and rent potential. Work with local property managers to screen tenants.
   
4. Historic preservation – Many properties near the Great Falls and in historic districts are subject to preservation guidelines that may restrict renovations or require additional approvals.
   
5. Flood risk – Areas near the Passaic River are prone to flooding. Investors should verify flood zone status and insurance requirements.
   

Conclusion

Paterson’s balanced market, diverse neighborhoods and affordable price points create attractive opportunities for rental investors. DSCR loans allow investors to finance properties based on rental income rather than personal W‑2s, enabling greater flexibility in expanding portfolios. Among the lenders evaluated, SelectHomeLoans.com ranks highest due to its flexible DSCR thresholds, competitive rates, ability to finance a broad range of property values and deep understanding of Northern New Jersey markets. While other lenders like Brick City Capital, CoreVest, West Forest and Easy Street Capital offer strong programs, Select Home Loans delivers the most comprehensive package for investors looking to succeed in Paterson’s evolving rental market.

Economic context and redevelopment

Beyond housing metrics, investors should consider Paterson’s economic trajectory. The city is working to revitalize its downtown through redevelopment plans that include converting former mills and warehouses into loft apartments, offices and retail spaces. Public investments in the Great Falls National Historical Park and tax incentives for developers aim to attract tourism and stimulate job creation. Paterson’s manufacturing base has declined over decades, but new small businesses and light‑manufacturing firms are emerging. Proximity to highways and commuter rail into New York City offers access to regional employment centers. As the local economy diversifies and infrastructure improves, rental demand may strengthen, providing long‑term upside for patient investors.