Quick answer
A DSCR purchase loan finances a non-owner-occupied rental using the property’s expected rent compared with its total monthly payment. Down payment, credit, and reserves still matter, and requirements vary by lender.
Who this fits
- Investors adding a door to an existing portfolio
- First-time investors with solid credit and cash for a down payment and reserves
- Buyers who want to close in an LLC
- Out-of-state investors buying in Texas metros
Do the homework during the option period, not after
Texas purchase contracts commonly include an option period — a short window where the buyer can walk away for any reason. For an investor, that window is gold. It is when you should have a realistic insurance quote in hand, a property tax estimate based on what the appraisal district will likely do after the sale, and a rent number you can defend.
We like to see a scenario before you sign. Send the address, your expected rent, and the purchase price, and we will run the full payment and tell you which lender programs it fits — or tell you it does not pencil, which is just as valuable.
Vacant properties and new purchases
Most purchases do not come with a tenant. In that case, lenders usually rely on the appraiser’s market rent analysis. If the property has an existing lease that transfers with the sale, some lenders will consider it. Either way, the appraisal is where your rent assumption gets tested, so be conservative going in.
The Texas angle. Many Texas appraisal districts reassess a property after it sells, and a rental gets no homestead cap. Budget your tax escrow on what the bill is likely to be next year, not what the seller paid this year.
Common questions
Can I buy a rental in an LLC with a DSCR loan?
Many wholesale DSCR lenders allow LLC vesting, typically with a personal guaranty from the members. Each lender has its own entity document requirements.
How much do I need to put down?
It varies by lender, credit profile, property type, and ratio. We will tell you what the programs we are shopping require for your specific scenario rather than quote a generic number.
Program availability, eligibility, and terms vary by lender and are subject to underwriting and lender/investor approval. Business-purpose, non-owner-occupied investment property only.