Case Study: DSCR Loan in North Little Rock, AR

About the Deal

A borrower purchased a three-bedroom, one-and-a-half-bath single-family rental in Bellwood, a suburban neighborhood in North Little Rock, Arkansas.

The loan amount came in at $73,500, below the $100,000 floor many DSCR programs require. That makes small rental deals difficult to finance, even when the collateral and cash flow are strong. Ridge Street Capital evaluated the file through its DSCR loans under $100K program.

The property was purchased for $100,000, which was $15,000 below a near-identical comp that had recently closed across the street. The appraised value came in at $119,000. Ridge Street Capital financed the purchase at 74% LTV on the acquisition price and 61.8% LTV on the appraised value.

What Made It Special

• The loan amount was below most DSCR program minimums: The $73,500 loan amount was below the floor many DSCR lenders will service. Small-balance files are often declined for operational reasons, not because the property is weak. Ridge Street Capital reviewed the deal on its fundamentals. The collateral was strong, the rental income was confirmed, and the file closed cleanly.
• The property was purchased below appraised value and below the closest comp: A near-identical property with the same street, floor plan, and bath configuration, sold for $115,000 in late 2025. This property closed at $100,000. With a $119,000 appraised value and a $73,500 loan, the investor had $45,500 in equity at closing and a 61.8% loan-to-value against the appraised value.
• The property qualified at 1.56 DSCR with no income documentation: Monthly rent of $1,007 against total PITIA of $671.92 produced a DSCR of 1.56, confirmed directly from the loan origination system. No W-2s, tax returns, or employment history were needed to qualify the loan.
• DSCR loans cap seller credit at 3% of the purchase price. This seller offered more, so we adjusted the loan to 74% LTV instead of 75%. The borrowers still came out ahead, with less cash needed at closing than if they had capped the credit instead.

The Result

Ridge Street Capital completed a DSCR purchase loan for a cash-flowing rental in North Little Rock with a 1.56 DSCR, a $73,500 loan amount, and $45,500 in equity built into the acquisition price.

• Loan amount: $73,500
• Loan type: 30-year fixed-rate DSCR loan
• Rate: 7.625%
• LTV: 74% of purchase price, 61.8% of appraised value
• DSCR: 1.56

More About Ridge Street Capital

Ridge Street Capital provides fix-and-flip loans, DSCR rental loans, and ground-up construction financing to real estate investors across 36 states. Our focus is exclusively on investment properties, which means every deal is reviewed by a team that understands what makes an investment work or fail.

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