The RICO: A New Mortgage Program that Qualifies Borrowers Based on Rental Income


Global Mortgage Group launched “The RICO” (Rental Income, COverage) program, which uses the borrower’s capacity to service or repay the yearly debt payment to the amount of net operating income (NOI) generated by the property. 

Simply put, if the current or projected rental income covers its mortgage payments and other costs - you qualify! 

There is NO need to provide income documents, and the process is simple, quick, and easy.

Foreign Buyers can use The RICO program to build a portfolio of investment properties quickly and easily. 

Important takeaways of “The RICO”

  • The RICO Ratio shows how much net cash flow is available to pay the mortgage; typically, it is a 1:1 coverage.
  • Possible to qualify on interest-servicing only
  • The DSCR might fluctuate yearly, but the approval will be based on the current/project rental income

The greater the RICO Ratio, the higher the net operating income available to service the debt.

RICO Ratio Formula

  • RICO Ratio = Net Operating Income / Debt Service

For instance, if a rental property generates $6,600 in rent monthly and the monthly mortgage payment is $6,600 (principal and interest), the debt service coverage ratio would be:

  • RICO Ratio = NOI / Debt Service
  • $79,200 Annual NOI / $79,200 Annual Debt Service = 1:1

A RICO Ratio of 1:1 indicates the property makes sufficient income to service the monthly debt.

While there is no industry standard for a substantial debt service coverage ratio in real estate, many lenders and real estate investors will strive for at least a 1:1 coverage. This indicates that, at the very least, the asset covers the minimal amount to service all debt payments.

While the debt service coverage ratio isn’t the only metric assessed when obtaining a RICO loan, it is an essential part of the approval process.

Why should you use “The RICO”?

Self-employed borrowers often have complicated tax returns or income statements. Instead of a long-drawn-out dissection of your income, you can now simply qualify off the rental income. Period. We won’t ask for tax returns, pay statements, etc. If the property qualifies, the loan is normally approved. If you currently own U.S. property with positive cash flow but are concerned your personal income won’t allow you to release equity or apply for a lower rate, you can now qualify for a loan with your rental income! What better time than now to refinance your property? If these reasons have yet to convince you, here are a few more:

  • Applying for a new loan? Qualify for a higher-yielding property using The RICO
  • Investing in Commercial Property? Qualify with The RICO
  • Identify profitable rental properties based on rental income. Qualify with The RICO