A DSCR (Debt Service Coverage Ratio) loan is a smart choice for real estate investors who want to qualify for financing based on property income instead of personal income. This guide lists trusted DSCR lenders in Texas that offer flexible loan options for short-term rentals, multifamily units, and investment properties. These companies help investors close deals faster by focusing on rental cash flow, not tax returns.
New to DSCR loans? Learn how to qualify for a DSCR loan in Texas step-by-step.
1. Griffin Funding
Website: griffinfunding.com
Headquarters: San Diego, CA
Licensed in Texas: Yes
Overview:
Griffin Funding offers DSCR loans to real estate investors in Texas. Borrowers qualify based on the rental income of the property. No tax returns or W-2s are needed.
Loan Features:
- Loan amounts from $100,000 to $5 million
- Up to 80% LTV
- DSCR as low as 0.75
- 30-year fixed or interest-only options
- No employment or income verification
Best For:
Texas investors buying or refinancing rental properties using rental cash flow.
2. Texas Premier Mortgage
Website: txpremiermortgage.com
Location: Houston, TX
Overview:
Texas Premier Mortgage provides DSCR loans for single-family rentals, multifamily units, and short-term rentals. They focus on fast closings and work with new and experienced investors.
Loan Features:
- DSCR loans with no personal income checks
- 20%–25% down payment
- DSCR starting at 1.00
- Multiple property financing available
Best For:
Texas-based investors who want a local team and quick approvals.
3. Big Law Investor
Website: biglawinvestor.com
Location: Nationwide
Overview:
Big Law Investor connects real estate investors with DSCR lenders across Texas. They focus on professionals like lawyers, doctors, and high-income earners who invest in real estate.
Loan Features:
- Find matched lenders through the Big Law Investor platform
- Support for DSCR loans and other investor-focused products
- Educational resources for real estate investing
Best For:
Investors looking for a DSCR lender referral with easy comparison tools.
4. Visio Lending
Website: visiolending.com
Headquarters: Austin, TX
Overview:
Visio Lending is a Texas-based DSCR lender with nationwide coverage. They offer a fast, online-driven application for buy-and-hold real estate investors.
Loan Features:
- DSCR as low as 0.75
- Up to 80% LTV
- Interest-only and 30-year fixed terms
- Loan amounts up to $2 million
- Close in as little as 21 days
Best For:
Texas landlords needing fast DSCR loans for rental portfolios.
5. Tidal Loans
Website: tidalloans.com
Location: Houston, TX
Overview:
Tidal Loans is a direct lender offering DSCR loans across Texas. They finance long-term rental properties with minimal paperwork and flexible options.
Loan Features:
- 30-year fixed or interest-only
- DSCR of 1.00 or higher
- No income or job verification
- Close in under 3 weeks
Best For:
Real estate investors who want simple loan terms and fast closings.
6. Easy Street Capital
Website: easystreetcap.com
Location: Austin, TX
Overview:
Easy Street Capital is a private lender offering DSCR loans in Texas for both short-term rentals (Airbnb) and long-term rentals.
Loan Features:
- DSCR loans for short-term rental income
- Airbnb-based income accepted
- Up to 80% LTV
- DSCR as low as 1.00
- Low-doc application
Best For:
Investors in Texas looking to finance short-term rental properties with flexible guidelines.
7. LBC Mortgage
Website: lbcmortgage.com
Location: Nationwide
Overview:
LBC Mortgage offers DSCR loans in Texas that are friendly to first-time investors. The company accepts both long-term and short-term rental properties.
Loan Features:
- DSCR qualification based on property cash flow
- Up to 80% LTV
- Terms up to 30 years
- Fast pre-approval process
Best For:
Investors in Texas who need guidance with their first DSCR loan.
8. Texas Premier Mortgage (Repeat Listing)
Website: txpremiermortgage.com
Note: This business was listed above but is featured again for its specialized services.
Extra Services:
- Dedicated support for self-employed investors
- Refinancing options available for DSCR-based portfolios
Why Listed Twice:
Texas Premier Mortgage offers localized service with a focus on repeat investors. Their strong presence in Texas and personalized approach justify this second listing.
What Is a DSCR Loan?
A DSCR loan allows borrowers to qualify using rental income from the property instead of personal income. It’s calculated as:
DSCR = Monthly Rental Income ÷ Monthly Loan Payment
If DSCR = 1.0, the rental income covers the loan payment. Most lenders require a DSCR of at least 1.0, but some accept 0.75.
Looking to buy in remote areas? See how a rural DSCR loan works for non-urban investment properties.
Who Can Use a DSCR Loan in Texas?
DSCR loans are ideal for:
- Property flippers who now rent
- Short-term rental owners (Airbnb, VRBO)
- First-time real estate investors
- LLCs and business entities
- Investors with complex or no tax returns
Pros of DSCR Loans
- No need to verify job or income
- Fast closing times
- Available to LLCs and corporations
- Use rental income as qualification
- Flexible documentation
Cons of DSCR Loans
- Higher interest rates than traditional loans
- Minimum down payment of 20%
- Prepayment penalties may apply
- May need solid rental history
How to Choose the Right DSCR Lender in Texas
1. Check DSCR Requirement:
Some lenders allow DSCR as low as 0.75. Others require 1.00 or higher.
2. Compare LTV Ratios:
Look for lenders offering up to 80% LTV if you want lower upfront cash.
3. Ask About Fees and Closing Time:
Some lenders charge more fees or take longer to close. Choose lenders with 21- to 30-day closing cycles.
4. Choose Based on Property Type:
Some lenders work best with short-term rental DSCR loans, others prefer long-term or multifamily.
FAQs
How does a DSCR loan work in Texas?
A DSCR (Debt Service Coverage Ratio) loan in Texas works by evaluating the cash flow generated by a property rather than the borrower’s personal income. This type of loan is primarily used by real estate investors and is based on the property’s ability to generate enough income to cover its debt obligations. Lenders calculate the DSCR by dividing the property’s net operating income (NOI) by the proposed debt service (loan payments). In Texas, investors can use DSCR loans to finance both residential rental properties and commercial real estate without needing extensive employment verification or tax documents, making it ideal for self-employed or non-traditional borrowers.
What is the minimum requirement for a DSCR loan?
The minimum requirement for a DSCR loan usually centers around the DSCR itself, which typically must be at least 1.0 or higher. A DSCR of 1.0 means the property earns just enough to cover its debt payments. However, many lenders prefer a ratio of 1.25 or more to provide a cushion. Other common requirements include a minimum credit score of around 620, a down payment of 20–25%, and the ability to show rental income either through lease agreements or market rent analysis. Lenders may also require a property appraisal and expect the property to be in rentable condition.
What is a good DSCR for a loan?
A good DSCR for a loan is generally 1.25 or higher. This means the property’s income is 25% more than its debt obligations, which provides a safety margin for the lender. A DSCR below 1.0 indicates that the property does not generate enough income to cover its loan payments, which could signal risk. The higher the DSCR, the more favorable the loan terms may be, including potentially lower interest rates and higher loan amounts, as it reassures lenders that the borrower can handle the loan.
What is the interest rate on a DSCR loan in Texas?
The interest rate on a DSCR loan in Texas can vary based on factors like the borrower’s credit score, loan-to-value ratio, property type, and the lender’s policies. As of recent trends, DSCR loan interest rates typically range between 7% and 10%. These rates are generally higher than traditional mortgage rates due to the increased risk involved in using the property’s income instead of personal financial documentation. Some lenders may offer adjustable-rate options, and others may include points or fees that impact the overall cost of borrowing.
What is the maximum loan amount for DSCR?
There is no fixed national maximum for DSCR loans, as the loan amount depends on the property’s income potential, the loan-to-value (LTV) ratio, and the lender’s underwriting criteria. However, many lenders offer DSCR loans from $100,000 to over $5 million. The maximum amount a borrower can qualify for will often be determined by how much income the property produces relative to the monthly debt payments. Higher-income properties can typically support larger loans.
Is DSCR a hard money loan?
While DSCR loans and hard money loans may seem similar because they both cater to real estate investors and rely less on personal income, they are not the same. A DSCR loan is based on a property’s income potential and is typically long-term, with more conventional underwriting and interest rates. Hard money loans, on the other hand, are short-term and based on the property’s value rather than its income. They come with higher interest rates, shorter terms (6–24 months), and are often used for quick acquisitions or fix-and-flip projects.
Can you cash out on a DSCR loan?
Yes, many lenders allow borrowers to take cash out using a DSCR loan, provided the property has sufficient equity and meets the lender’s DSCR and LTV requirements. Cash-out DSCR loans can be a great tool for real estate investors looking to leverage the equity in a rental property to reinvest, renovate, or consolidate debt. Typically, lenders require a DSCR of at least 1.25 and will limit the cash-out amount to 70–75% of the property’s appraised value.
How much is DSCR?
DSCR is not a monetary amount but a ratio used to measure a property’s income against its debt obligations. It is calculated by dividing the Net Operating Income (NOI) of a property by its total debt service (principal and interest payments). For example, if a property earns $60,000 in annual net income and the annual debt service is $48,000, the DSCR is 1.25. This means the property generates 25% more income than is needed to pay its debt, indicating good financial health from a lender’s perspective.
What is a DSCR loan called?
A DSCR loan is often referred to as a “Debt Service Coverage Ratio loan” or a “cash-flow-based loan.” In the real estate investing world, it may also be described as a “rental income loan” or “no-income-verification loan,” highlighting its core feature of basing approval on property cash flow rather than the borrower’s income. It’s a specialized type of non-QM (non-qualified mortgage) loan used by investors who prioritize property performance over traditional credit underwriting.
How much is a downpayment on a DSCR loan?
The down payment for a DSCR loan typically ranges from 20% to 25% of the property’s purchase price. However, some lenders may allow slightly lower down payments depending on the strength of the DSCR, credit score, and overall loan structure. The larger the down payment, the more likely you are to qualify for better loan terms and rates. This upfront investment also reduces the lender’s risk and increases your equity in the property from the outset.
How do I get a DSCR?
To get a DSCR loan, you’ll need to work with a lender that offers this product, often a non-QM lender or mortgage broker specializing in investor loans. The process involves selecting a qualifying property, submitting information about its rental income (actual or projected), undergoing a property appraisal, and providing basic documentation like credit reports and a down payment. Unlike traditional loans, you don’t need W-2s or tax returns. Approval hinges on the property’s DSCR, which must meet or exceed the lender’s minimum threshold—usually 1.0 or higher.
What DSCR is required for a loan?
The DSCR required for a loan typically starts at 1.0, which indicates the property’s income equals its debt payments. However, most lenders prefer a DSCR of 1.25 or higher to account for potential vacancies, maintenance costs, and unexpected expenses. A higher DSCR demonstrates stronger cash flow and lower risk, which may lead to more favorable loan terms. In some cases, lenders might allow DSCRs below 1.0, but these loans often come with stricter terms and higher interest rates.
Final Thoughts
DSCR loans help real estate investors in Texas qualify for financing without relying on personal income. The lenders listed above offer competitive options for both new and experienced investors. Whether you’re investing in long-term rentals in Dallas or short-term properties in Austin, there’s a DSCR lender that fits your plan.
Investing outside Texas? See the best DSCR loan options in Florida.
Tip: Always compare DSCR, LTV, loan terms, and fees before choosing a lender.