On September 17, 2025, the Federal Reserve lowered its federal funds rate by 25 basis points, moving the target range to 4.00%–4.25%. This marked the first rate reduction since December 2024 and signals a shift toward easing monetary policy amid slowing job growth and softer economic conditions according to Investopedia. Looking ahead, the Fed has indicated expectations for more rate cuts in 2025 and at least one more in 2026.
This recent cut has sparked a lot of conversation in the real estate world, and for good reason. Lower rates have ripple effects across the market, from mortgage affordability to investor financing. But what does this really mean for you as a fix-and-flip or rental property investor? And where does private lending fit into the picture? Let’s break it down.
What Falling Rates Mean for DSCR Loans (and Your Cash Flow)
One of the biggest areas impacted by the Fed’s decision is DSCR (Debt Service Coverage Ratio) loans. Because these products are tied more directly to broader interest rate trends, falling rates often translate into more competitive financing options thereby increasing the cash flow of your rental portfolio.
If you purchased a rental property earlier this year using a DSCR loan, this rate cut could provide you with the opportunity to re-finance at a lower rate to increase your net operating income (NOI). It could also make it easier for you to sell the asset for a profit to a buyer that could achieve the same economies in the DSCR financing market while you take the profits to secure a new rental property at lower rates. For buy-and-hold investors, lower DSCR rates mean you can expand your portfolio while setting the stage for stronger long-term cash flow.
In short: it’s a good time to hold onto rentals or begin scaling a rental portfolio!
Why ResCap Still Holds the Advantage on RTL Loans
With the Fed’s recent move, private lending continues to offer benefits you won’t find at the bank. Banks move slow. Private lenders move fast. Speed wins deals. And advance rates help get deals done.
Traditional banks often cap leverage at 65% to 70% of the ARV of the home. This loan-to-value (LTV) will get the job done, but at what cost? Yours! Working with a private lender an investor can move the needle on the advance rate to 70% or 75% of the ARV of the home. For the SFR investor, that means more capital to work with on the next deal coming your way.
At Residential Capital Partners, we can finance up to 75% of the ARV of the home. But we take it a step further – we advance 100% of the purchase and 100% of the repairs up to 75% of the ARV. Cash is king. And keeping a 10% down payment in your pocket means more cash, more deals, and more profits. That’s an advantage no other private lender can offer – that’s the ResCap Way!
The Bottom Line for Real Estate Investors
The bottom line? Rate cuts may open new opportunities, but the real advantage comes when you pair them with the flexibility and speed of and experienced private lending partner.
- More Leverage: Borrow more than banks typically allow, keeping your capital freed up so you can scale faster.
- Faster Closings: Move on opportunities in weeks, not months.
- Less Exposure and Red Tape: Avoid restrictive bank requirements like tax return scrutiny or loan caps.
Final Thoughts
Real estate investing moves fast, and opportunities don’t wait on paperwork. Lower DSCR rates may create favorable conditions for rental investors. Top that off with a private lender who can help you move quickly, scale with confidence, and maximize your profit potential, and you have a recipe for success.
At Residential Capital Partners, we’re here to help you combine market momentum with reliable funding, whether it’s fix-and-flip funding or your next rental property investment. ResCap offers end-to-end solutions for the SFR investor.
Ready to take advantage of today’s market?
Apply now and let’s talk about how we can help you leverage more, move faster, and invest smarter.
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