DSCR rental loans, 30 year
Long-term financing for Texas rental property, qualified on the property’s cash flow rather than your personal income. No tax returns, no W-2s, no debt-to-income calculation. Closed in your LLC, available on single assets and portfolios.
Who this is for
Buy and hold landlords. Investors who have hit the conventional ten-property ceiling. Self-employed owners whose tax returns show the deductions their CPA worked hard for and, as a result, will not qualify them for anything. And every flipper who ran the numbers again and decided to keep the house.
Why the property qualifies instead of you
A conventional lender asks what you earn and what you owe, and rejects a perfectly good rental because your Schedule E looks the way a well-advised investor’s Schedule E is supposed to look. A DSCR lender asks one question: does the rent cover the payment? If it does, the loan works, whether you own one property or thirty.
That is also the discipline in it. Coverage below 1.00x is a property that costs you money every month. It is financeable, and sometimes correctly so in an appreciating submarket, but you should choose it deliberately rather than discover it.
Structures worth knowing about
- 30 year fixed, the default. Highest payment certainty, best for long holds.
- 5/6 and 7/6 ARM: lower start rate, fixed for five or seven years. Sensible when you know the hold is finite.
- 10-year interest only: materially improves coverage and cash flow, at the cost of no amortization. Useful for qualifying a tight deal; use it knowingly.
- Portfolio blanket, one loan over five or more properties with release provisions. Better pricing, one closing, one set of costs.
What we need from you
- Address, and the lease or a market rent analysis
- Entity documents and the guarantor’s details
- Two months of bank statements, reserves and cash to close
- Insurance, and the payoff statement if refinancing
- For short term rentals: platform history, or the market data you are relying on
DSCR loans, specifically
What is DSCR and how is it calculated?
Debt service coverage ratio: the property’s monthly gross rent divided by its monthly principal, interest, taxes, insurance and any HOA dues. Rent of $2,400 against a $2,000 total payment is a 1.20x DSCR. At 1.00x the property exactly covers itself. Most programs want 1.00x or better; stronger coverage generally buys better pricing or higher leverage, and files below 1.00x are possible at reduced leverage with compensating strength.
What documents do you actually need?
Identity, entity documents, a credit report, two months of bank statements showing reserves and cash to close, the lease or a market rent analysis, insurance and title. That is substantially the whole list. No tax returns, no pay stubs, no employment verification, no debt-to-income ratio. The property qualifies itself.
Can I use short term rental income?
Yes, on many programs. Twelve months of documented platform history is the strongest support; where that does not exist, a market-data projection can be used, usually at a haircut and sometimes with a long-term rent floor. Local short term-rental regulation matters here: a city that is moving to restrict them changes the underwriting, so tell us where the property is early.
How many properties can I finance?
There is no meaningful cap, which is the entire point compared with conventional financing and its ten-property limit. Investors routinely build twenty and thirty-property portfolios on DSCR debt. Once you are past four or five, a portfolio loan, one note over several properties with release provisions so you can still sell individually, usually prices better and closes once instead of five times.
What is the prepayment penalty?
Most DSCR loans carry a prepayment structure, commonly 5/4/3/2/1 declining over five years or a three year step down. It can often be bought down or shortened for a higher rate, which is a sensible trade if you expect to sell inside the window. Decide that at the term sheet, not at the closing table.
Can I refinance my hard money loan into this?
That is exactly what it is for. Finish the project, sign a lease, season it briefly if the program requires it, and roll into 30 year debt with the same team that funded the bridge. Because we underwrote the exit when we wrote the bridge loan, the refinance is a continuation rather than a new search.
Every deal gets a real answer
Tell us the property, the plan and the number you need. A credit officer reads it and tells you what it will support.
- Texas hard money. A term sheet from the people who fund the loan.
- Commercial, all 50 states. Quotes from the desks that cover your asset.
- Outside the box? A straight reason, and usually a name that does fund it.