DSCR Loans

Let's talk real numbers. DSCR loan rates typically run 1-2% above what you'd see on a conventional investment property loan. In 2026, that puts most borrowers in the 7.5-9% range depending on the deal.

Why the premium? You're trading documentation for convenience. No tax returns, no W-2s, no employment verification — that flexibility comes at a cost, but for most investors the math still works.

Your actual rate depends on a few things. A DSCR ratio above 1.25 gets you better pricing. Credit scores above 740 unlock the lowest rate tiers. Lower LTV (meaning more money down) helps too.

Property type matters as well. A single-family long-term rental in a strong market will price better than a short-term rental condo in a tourist town. Lenders see less risk in stable, predictable cash flow.

I price DSCR loans every day — send me your deal and I'll tell you exactly where you land.

Short-term rental properties — Airbnb, VRBO, vacation rentals — can qualify for DSCR loans. The key is documented rental income history.

Most lenders want 12 months of STR income history from the property. If you're purchasing a new STR, some lenders will use market rent comparables from AirDNA or similar platforms.

STR DSCR loans typically require:

• 25-30% down (higher than standard DSCR)
• 12 months STR history or AirDNA comp
• Minimum 1.0 DSCR based on projected income
• Credit score 680+

Markets with the strongest STR DSCR activity: Florida (Miami, Orlando, Tampa), Tennessee (Nashville, Gatlinburg), Texas (Austin, San Antonio), Colorado (Denver, mountain markets). Send me the property address and I'll pull the AirDNA comps and tell you what the deal looks like.

Florida is one of the strongest DSCR markets in the country — and it's not hard to see why. Between year-round tourism, population growth, and strong rental demand, properties in Miami, Tampa, Orlando, and Jacksonville consistently cash flow.

Short-term rentals near the coast and theme parks perform especially well on DSCR analysis. Long-term rentals in growing metro areas like Tampa and Jacksonville offer stable, predictable income that lenders love.

No state income tax is a bonus for out-of-state investors looking to maximize returns. I close DSCR loans across Florida every month.

See DSCR loan details for Florida →

Texas is a DSCR powerhouse. Dallas, Houston, Austin, and San Antonio all have the rental fundamentals that make DSCR loans work — strong job growth, population influx, and affordable housing relative to the coasts.

No state income tax means your cash flow goes further here than in most other states. That translates directly into better DSCR ratios and more favorable loan terms.

Whether you're buying a duplex in San Antonio or a portfolio of single-family rentals in the DFW suburbs, DSCR financing makes scaling your Texas portfolio straightforward. Let's run the numbers on your next deal.

See DSCR loan details for Texas →

California DSCR loans work in the high-priced coastal markets and the inland growth corridors equally well. Long-term rental demand in San Diego, Los Angeles, Orange County, and the Bay Area combines with short-term rental demand in the wine country, the desert, and the Sierra Nevada to give California investors the deepest mix of DSCR-eligible deals in the country.

Property prices in major California metros require larger DSCR loan amounts, so credit score and reserves matter more here than they do in lower-cost states. Rate buy-down points are common tools to push DSCR ratios into a stronger pricing tier when rents are tight relative to PITI.

See DSCR loan details for California →

Maryland DSCR loans are the workhorse product for investors in Baltimore, Annapolis, and the DC metro corridor. Strong long-term rental demand in Baltimore combines with short-term vacation rental upside on the Eastern Shore and near Annapolis to create a rare mix — you can run the same DSCR program on a year-round SFR or a summer STR.

Proximity to Washington DC is Maryland's structural edge. Silver Spring, Bethesda, and Rockville draw top-tier W-2 rental demand from DC commuters, and Maryland investors typically see healthier net operating income than comparable DC or Virginia deals once state tax rates are factored in.

DSCR Loans in Maryland →

Most DSCR loans require 20-25% down. That is the baseline. Some programs go as low as 15% with a 720+ credit score and strong DSCR ratio.

The down payment requirement is higher than conventional investment loans for one reason — DSCR lenders are taking more risk by not verifying your personal income. The property has to carry more weight, and more equity gives them that cushion.

Here is how it breaks down by scenario:

• Standard DSCR (1.0+ ratio): 20% down minimum
• Strong DSCR (1.25+ ratio): Some lenders go 15% down
• Short-term rental property: 25-30% down typical
• 2-4 unit property: 25% down typical
• Loan over $1.5M: 25-30% down typical

The good news: down payment assistance programs do NOT typically apply to DSCR loans. This is an investment product — you need real reserves, not assistance.

One thing I see borrowers miss: reserves. Most DSCR lenders want 6-12 months of PITI (principal, interest, taxes, insurance) in the bank after closing. That is separate from your down payment. Budget for both.

Most DSCR lenders require a minimum 660 credit score. That is the floor. Below 660 and your options get very limited.

Here is where credit score actually matters on DSCR loans: pricing, not approval.

660-679: You qualify, but rates run higher. Expect a 0.5-1% rate premium above a 720+ borrower.

680-719: Standard pricing, most programs available.

720+: Best rates, best terms, lowest down payment options.

760+: Top-tier pricing. If you have this and strong DSCR, you get the best deal in the market.

Unlike conventional loans, a DSCR lender is not as fixated on your credit history because your income is not the qualification factor. But your credit score still affects your rate significantly. A 40-point difference can cost or save $200-300 per month on a $500,000 loan.

A DSCR cash-out refinance lets you pull equity out of an investment property without showing personal income.

Same concept as a standard DSCR loan — the property qualifies based on rent, not your W-2. But instead of purchasing, you are refinancing an existing property and taking cash out at closing.

Most DSCR cash-out programs allow:

• Up to 75% LTV on cash-out refinance
• No seasoning requirement on some programs (can refi shortly after purchase)
• No limit on number of properties
• Loan amounts up to $3M+

Most common uses for DSCR cash-out: Fund the down payment on the next property. Cover rehab costs on another rental. Pay off hard money debt. Build reserves after a tight closing.

The DSCR calculation on a refinance uses the same formula: monthly rent divided by the new monthly payment. If that ratio hits 1.0 or above, you qualify.