• Nadlan Capital Group - USA Real Estate Financing for Foreign Nationals and Residents

  🏦 What is a PFS in a DSCR Loan — And Why Is It Required?

  Posted by Nadlan Group on April 16 at 21:19

  🏦 What is a PFS in a DSCR Loan — And Why Is It Required?

  When applying for a DSCR (Debt Service Coverage Ratio) loan, you may be surprised to find that lenders often request a PFS, Or Personal Financial Statement — even though these loans are known for being "no income verification."

  📌 What is a Personal Financial Statement (PFS)?

  A Personal Financial Statement is a document that summarizes the borrower's:

  • Assets (eg real estate, bank accounts, investments)

  • Liabilities (eg mortgages, credit cards, personal loans)

  • Net worth (Assets minus Liabilities)

  • Monthly income and expenses (optional, but sometimes included)

  • Ownership in LLCs or corporations (if applicable)

  • Signature and date to certify accuracy

  📋 Why Do Lenders Require a PFS in a DSCR Loan?

  Even though DSCR loans are based on property income, the PFS is still important for these reasons:

  ✅ Evaluate Financial Stability

  Lenders want to confirm the borrower is not overleveraged and has sufficient financial strength.

  ✅ Verify Reserve Requirements

  Many DSCR programs require 3 to 12 months of PITIA (Principal, Interest, Taxes, Insurance, and possibly HOA) in reserves. A PFS helps document those liquid assets.

  ✅ Support for Foreign National Borrowers

  Foreign nationals often lack US tax returns or credit history, so a PFS helps showcase their financial profile.

  ✅ Portfolio or Blanket Loans

  If the borrower is refinancing or financing multiple properties, the PFS gives the lender a full picture of financial capacity.

  ✅ Lender or Investor Compliance

  Some funding institutions or investors require a signed PFS to comply with underwriting audits or risk management policies.

  📄 What Does a PFS Include?

  Here's what is usually listed on a Personal Financial Statement:

  • Assets: Real estate, vehicles, cash, retirement accounts, stocks, business ownership

  • liabilities: Mortgages, student loans, credit cards, other debts

  • Monthly Income (optional): Can be self-reported for internal reference

  • Monthly Expenses (optional): Used for internal debt evaluation

  • Net Worth Calculation: Automatically derived from total assets minus total liabilities

  • Signature & Date: Confirms authenticity of the provided information

  🧠 Final Thoughts

  While a DSCR loan doesn't require traditional documents like W2s, tax returns, or pay stubs, PFS is often required to demonstrate liquidity and responsible financial management. It gives the lender added confidence — especially in riskier loan scenarios like foreign nationals or multi-property investors.

  If you like to get a quote from an auction of 3000+ lenders, you are more than welcome to contact us at http://www.NadlanCapitalGroup.com

  

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