DSCR loans — Debt Service Coverage Ratio loans — have become one of the most popular loan programs for Texas real estate investors. The reason is simple: you qualify based on the property’s income, not your personal income.
What Is a DSCR Loan?
A DSCR loan underwrites the borrower’s ability to repay based on the rental income of the property, not their personal income or tax returns. The debt service coverage ratio is calculated by dividing the property’s gross rental income by the total debt payment. A DSCR of 1.0 or higher typically qualifies.
DSCR Formula Example
Monthly rent: $3,000
Monthly PITI payment: $2,500
DSCR: 3,000 ÷ 2,500 = 1.2 — qualifies
Benefits of DSCR Loans for Texas Investors
- No personal income documentation required
- No tax returns or W-2s
- Qualify on as many properties as you want — no limit
- 30-year fixed terms available
- Single-family, small multi-family, and short-term rentals eligible
- Close in 3 to 4 weeks
Who Uses DSCR Loans in Texas
Self-employed investors whose tax returns don’t reflect true income. Investors with large portfolios who have maxed out conventional loan limits. Anyone building a rental portfolio who wants to qualify deal-by-deal on cash flow.
Texas DSCR Loan Markets
DSCR loans work especially well in strong rental markets: Houston, Dallas, Austin, San Antonio, and their surrounding metros. Short-term rental (Airbnb/VRBO) income can often be used to calculate DSCR using market rent data or actual booking history.
Call 877-895-3634 to get a DSCR loan quote for your Texas investment property.