No tax returns or W-2s
Personal income is not reviewed. The property either covers its payment or it does not — that is the entire underwriting question on the income side.
DSCR loans for Texas real estate investors.
Qualify on the property's cash flow, not your personal income. No tax returns, no W-2s, no DTI scrub. For Texas investors scaling rental portfolios.
- Property cash flow qualifies, not personal income
- No tax returns or W-2s required
- LLC vesting allowed
A mortgage that qualifies on the property's cash flow.
A Debt-Service Coverage Ratio (DSCR) loan is a Non-QM mortgage for investment properties that qualifies on the property's rental cash flow rather than your personal income. The DSCR ratio equals gross monthly rent divided by PITIA (principal, interest, taxes, insurance, association dues). Lenders typically want DSCR of 1.0 or higher (some allow 0.75 with offsets). Best for investors growing portfolios beyond the conventional 10-property cap, investors closing in LLCs for asset protection, and investors whose personal income picture is too complex for conventional underwriting.
How a DSCR loan goes from inquiry to keys.
- 01
Identify the investment property
DSCR underwriting is property-driven, so the address comes first. We pull comps and run a back-of-the-napkin DSCR before you go under contract — no point chasing a property whose rent will not cover the payment.
- 02
Determine market rent
The lender uses the appraiser's rent schedule (Form 1007 / 1025) — the appraisal's market-rent finding — or your existing lease if the property is already tenanted. Short-term rental projections require additional documentation.
- 03
Calculate DSCR
DSCR equals gross monthly rent divided by PITIA. A property renting at $2,500 with PITIA of $2,000 has a DSCR of 1.25. Most lenders price tightest at DSCR of 1.0 and above, with reduced LTV and higher pricing for ratios between 0.75 and 1.0.
- 04
Standard credit + reserves underwriting
Personal income is not reviewed, but credit, reserves, and entity documentation (if vesting in an LLC) all underwrite normally. Most DSCR files want 3–6 months of PITIA in reserves per financed property.
- 05
Clear-to-close — LLC vesting OK
Closing disclosure goes out at least three business days before close per TRID. You sign at title (often as the LLC manager), funds wire, and you take title. Most DSCR lenders are comfortable with single-purpose LLC vesting; some will lend to multi-property holding LLCs.
Built for Texas investors scaling beyond conventional.
Conventional Fannie/Freddie financing caps you at 10 financed properties total — and that ceiling gets crowded fast for active investors. DSCR removes the cap because the loan is qualified on the property, not on you. Add LLC vesting, no tax-return scrub, and Texas's strong rental fundamentals, and DSCR becomes the default tool for investors building real portfolios in DFW, Houston, San Antonio, and Austin. We work DSCR files weekly and know which lenders have the sharpest pricing at each DSCR tier.
DSCR is the right tool when:
- You own 5+ rental properties already and are scaling
- You require LLC vesting for asset protection
- Your personal income picture is too complex for conventional underwriting
- You are scaling beyond the Fannie/Freddie 10-property cap
- You are an out-of-state investor buying Texas rentals
Why DSCR wins for Texas rental-portfolio investors.
Property cash flow underwriting
DSCR is calculated from gross rent and PITIA. Clean, transparent math — and you can model it before you write the offer.
LLC vesting allowed
Most DSCR lenders close in single-purpose LLCs (and some in multi-property holding LLCs). That is meaningful for asset protection and for investors who run their portfolios as a real business.
65–80% LTV typical
Standard purchase LTV runs 75–80% on properties with DSCR of 1.0 or higher. Lower DSCR ratios (0.75–1.0) typically come with reduced LTV and a pricing adjustment.
FICO 660+ qualifies
Most DSCR programs accept 660 FICO at higher pricing, with sharpest pricing at 720+. That is more accessible than conventional investment-property pricing for borrowers with credit dings.
Cash-out refinance up to 80% LTV
DSCR cash-out refis are widely available up to 75–80% LTV on properties that maintain DSCR of 1.0 or higher post-refinance. Useful for the recapitalize step in BRRRR.
1.0+
Target DSCR ratio
DSCR loan questions, answered.
What is DSCR?
DSCR stands for Debt-Service Coverage Ratio. It is the ratio of a property's gross monthly rent to its PITIA payment (principal, interest, taxes, insurance, association dues). DSCR is the lending world's standard measure of how comfortably a property covers its own debt service.
How is DSCR calculated?
DSCR equals gross monthly rent divided by PITIA. Example: a property renting at $2,500 a month with PITIA of $2,000 has a DSCR of 1.25 ($2,500 ÷ $2,000). The rent figure comes from the appraiser's rent schedule on a vacant property or from the existing lease on a tenanted one.
What's the minimum DSCR?
Most DSCR lenders want 1.0 or higher for best pricing and full LTV. Some lenders will go to 0.75 with reduced LTV and a pricing adjustment. A handful of programs offer "no ratio" DSCR (DSCR not calculated), but those typically come with materially higher rates and lower LTV.
Can I close in an LLC?
Yes — most DSCR lenders prefer or require LLC vesting. The standard structure is a single-purpose Texas LLC for the property, with the operating agreement and EIN provided at application. Some lenders also allow multi-property holding LLCs. We coordinate with your attorney on the entity structure if you do not have one in place.
Do you allow short-term rentals (Airbnb)?
Some DSCR lenders underwrite short-term rental income with documented projections (AirDNA reports, prior STR operating history); others use long-term rent comps even for properties intended for short-term use. We will tell you which lender to chase based on the property and the projected stay mix. Note that Texas city-level STR regulations (Austin, Dallas, Fort Worth) affect the analysis.
How does this differ from a Conventional Investment Property loan?
Conventional investment property loans qualify on your personal income and tax returns — and Fannie/Freddie cap you at 10 financed properties. DSCR qualifies on the property's cash flow, has no portfolio cap, allows LLC vesting, and does not pull tax returns. Conventional usually wins on rate at low property counts; DSCR wins on flexibility, scale, and entity structure.
Building your Texas rental portfolio? Let's structure the DSCR.
DSCR loan requirements at a glance.
- Investment property only (not owner-occupied)
- Property must support DSCR of 1.0 or higher (some programs allow 0.75 with offsets)
- 660+ FICO typical (best pricing at 720+)
- 20–35% down depending on DSCR, LTV, and FICO tier
- Reserves of 3–6 months PITIA per financed property
- LLC vesting allowed and often preferred
- Texas property
- Cash-out refi available up to 80% LTV with qualifying DSCR
DSCR vs Conventional Investment vs Bank Statement Investment at a glance.
| Income calc | Vesting | Down % | Best for | |
|---|---|---|---|---|
| DSCR | Property rent ÷ PITIA | LLC OK | 20–35% | Investors scaling beyond 10 properties or vesting in LLC |
| Conventional Investment | Personal tax-return income | Personal name only | 15–25% | Investors with 1–10 properties and clean personal income |
| Bank Statement Investment | 12–24 mo deposits | Personal name; some lenders LLC | 20–25% | Self-employed investors with strong deposit profile |
Ready to move on a DSCR Loan?
Get a soft-pull pre-approval in minutes. No credit hit, no surprises.
Other ways we close
Bridge / Hard Money
Short-term acquisition financing for properties that need work before they qualify for DSCR — the common BRRRR entry point.
Learn morePortfolio / Blanket Loans
Single loan secured by multiple rental properties — useful for investors who want to consolidate financing across a portfolio.
Learn moreFix-and-Flip Loans
Short-term financing for investors flipping properties — pairs with DSCR for the BRRRR refinance step.
Learn more