Straight answers about Texas DSCR loans

A DSCR (debt service coverage ratio) loan is a business-purpose mortgage on non-owner-occupied rental property. Lenders qualify it primarily on whether the property’s rent covers its full monthly payment — principal, interest, taxes, insurance, and HOA dues — rather than on your personal income.

Divide the property’s monthly rent by its total monthly payment (PITIA). Rent of $2,400 against a $2,000 payment is a 1.20 DSCR. Our calculator does the math with the rate you enter; lenders run their own figures in underwriting.

It depends on the lender. Many programs look for 1.0 or higher, some want more cushion, and some consider lower ratios with compensating strengths such as more equity or reserves. We match your deal to lenders whose guidelines fit it.

Typically not for income. DSCR programs focus on the property’s cash flow. Expect lenders to review credit, bank statements for down payment and reserves, and entity documents if you close in an LLC.

No. We arrange business-purpose loans for non-owner-occupied investment property only. If you or a family member will live in the home, including one unit of a multifamily, it is not eligible.

Commonly single-family rentals, 2-4 unit properties, townhomes, and some condos, plus short-term rentals with certain lenders. Eligibility varies by lender and property condition.

Many wholesale DSCR lenders allow LLC vesting, typically with a personal guaranty. Lenders usually ask for formation documents, the company agreement, an EIN letter, and proof the entity is in good standing.

Texas is our focus and the reason this brand exists. Loan Daddy LLC may be able to help with investment property in other states, subject to licensing and lender availability — ask us.

Texas has no state personal income tax, and local governments rely heavily on property tax. That tax is part of the monthly payment lenders use, so a higher tax bill lowers your DSCR dollar for dollar.

Texas’s constitutional home-equity rules (Article XVI, Section 50(a)(6)) apply to homesteads. Non-homestead investment property is generally treated differently. Make sure no homestead exemption is filed on a rental, and confirm details with your title company or a Texas attorney.

The Texas Windstorm Insurance Association provides wind and hail coverage in designated coastal areas when private insurers will not. If your rental is in a designated area, windstorm coverage and its cost will be part of underwriting.

No. DSCR Loans Texas is a brand of Loan Daddy LLC, a licensed mortgage broker. We shop your scenario with wholesale lenders and arrange the financing; the lender you choose underwrites and funds the loan.

We do not advertise rates because they depend on the lender, the property, your credit, the ratio, the loan amount, and market conditions on the day you lock. Once we have your scenario, we will show you actual options from the lenders we shop.

No. The form starts a conversation so we can review your scenario. It is not an application for credit and not a commitment to lend.

Timelines depend on the appraisal, title, insurance, entity documents, and the lender’s queue. Having your leases, insurance quote, and LLC paperwork ready is the single best way to keep things moving.