Underwrite Texas rental properties using rental cash flow alone. Zero W-2s, no personal tax returns, and no DTI limits. Built with 2027 Texas county property tax rates, 10-year interest-only modeling, and AirDNA short-term rental underwriting. Explore our Texas DSCR loan guidelines or calculate your max loan below.
Real-world examples illustrating how our underwriting guidelines solve common financing hurdles across Texas metros.
Why sophisticated real estate investors bypass traditional retail banks.
Property rental cash flow only
Personal W-2s, 2 years tax returns, paystubs
Unlimited Properties (Up to $3.5M/property, $10M+ portfolio capacity)
Strictly capped at 10 financed properties
Allowed • LLC, Series LLC, S-Corp, Trust
Personal names only (Prohibited in LLC)
Zero DTI calculation (Ignored completely)
Capped at strict 45%–50% DTI limit
AirDNA projections & 1007 market comps permitted
Requires 2 years filed tax return Schedule E
Exempt (Commercial business purpose exemption)
Constrained by 80% LTV homestead limits
14 to 21 Days (Average SLA)
30 to 45 Days with extensive W-2/DTI underwriting
| Feature | STX Lending DSCR Loan | Traditional Conventional Bank |
|---|---|---|
| Income Qualification | Property rental cash flow only | Personal W-2s, 2 years tax returns, paystubs |
| Maximum Property Cap | Unlimited Properties (Up to $3.5M/property, $10M+ portfolio capacity) | Strictly capped at 10 financed properties |
| Vesting in LLC / Entity | Allowed • LLC, Series LLC, S-Corp, Trust | Personal names only (Prohibited in LLC) |
| Personal Debt-to-Income (DTI) | Zero DTI calculation (Ignored completely) | Capped at strict 45%–50% DTI limit |
| Short-Term Rentals (AirDNA) | AirDNA projections & 1007 market comps permitted | Requires 2 years filed tax return Schedule E |
| Texas Section 50(a)(6) Rules | Exempt (Commercial business purpose exemption) | Constrained by 80% LTV homestead limits |
| Typical Closing Speed | 14 to 21 Days (Average SLA) | 30 to 45 Days with extensive W-2/DTI underwriting |
Whether you are purchasing your first single-family rental in San Antonio or executing a BRRRR cash-out refinance on a 4-unit portfolio in Dallas, understanding how lenders calculate the Debt Service Coverage Ratio is the difference between an approved loan and a dead contract.
A DSCR loan (Debt Service Coverage Ratio loan) is an asset-based mortgage designed specifically for real estate investors. Unlike conventional agency loans governed by Fannie Mae or Freddie Mac—which scrutinize your personal debt-to-income (DTI) ratio, personal tax returns, W-2 statements, and student loans—DSCR underwriting evaluates only one primary metric: Can the property pay for its own mortgage?
Where PITIA represents Principal, Interest, Texas Property Taxes, Hazard/Flood Insurance, and monthly HOA assessments.
For example, if you acquire a single-family investment property in San Antonio that rents for $3,200 per month, and the total monthly mortgage payment (including principal, interest, Bexar county taxes, and insurance) is $2,500, your calculation is:
Different lenders utilize distinct underwriting bands. At STX Lending, our DSCR matrix is divided into five clear tiers to give investors maximum flexibility:
Maximum leverage up to 80%–85% LTV, lowest Non-QM rates, 10-Yr Interest-Only eligible, and 3–6 months reserves.
Preferred underwriting tier, standard approval up to 80% LTV, competitive market pricing, 3–6 months reserves.
Rent covers 100% of debt service. Standard 20%–25% down (75%–80% LTV), full LLC vesting, and 3–6 months reserves.
Properties with negative cash flow qualify under specialized no-ratio guidelines. Requires 25%–30% down (70%–75% LTV) and 6–12 months reserves.
Properties requiring rehab or vacant stabilization financed via short-term bridge/hard money, then refinanced into 30-year DSCR upon completion.
Professional investors rarely ask “What is my DSCR?” after they get under contract. Instead, they calculate their maximum allowable offer price before making a bid. By toggling to the Max Purchase Power tab in our calculator above, you can reverse-engineer your maximum borrowing power:
The Texas vacation rental market—encompassing the Texas Hill Country, Lake Travis, Canyon Lake, New Braunfels, Galveston, and Austin—generates substantially higher gross revenues than standard long-term leases. Under conventional lending, banks reject vacation rental income unless you show two consecutive years of Schedule E tax returns.
Under our Texas DSCR STR Program, vacation properties qualify using:
Texas possesses unique constitutional protections under Article XVI, Section 50(a)(6), which limits primary home equity cash-out loans to an 80% maximum loan-to-value ratio, mandates a 12-day waiting cooling-off period, and restricts lender fees to 1%.
Critical Distinction for Investors: DSCR loans are strictly business-purpose commercial loans. Because the borrower certifies that the collateral is an investment property and will never be occupied as a primary residence, DSCR loans are completely exempt from Texas Section 50(a)(6) rules. This means you can execute rapid cash-out refinances to harvest equity, close directly in the name of a Texas LLC or Series LLC for asset protection, and avoid homestead title delays.
Have questions about qualifying an LLC, rental comps, or multi-property portfolios? Speak directly with a dedicated Texas Non-QM loan officer.
Don't let personal DTI caps or slow retail banks kill your real estate acquisitions. Submit your deal scenario today for an instant loan estimate without affecting your credit.
Compliance & Lending Disclosure: This Texas DSCR loan calculator is provided for informational and educational purposes only to assist real estate investors with deal evaluation. Actual qualification, interest rates, down payments, and loan terms are determined through full underwriting by South Texas Lending and its lending partners, based on credit score, liquidity reserves, Fannie Mae Form 1007 fair market rent appraisal or actual lease agreements, and property condition. DSCR loans are strictly business-purpose, non-owner occupied commercial loans and cannot be used for primary residences. This is not a commitment to lend or a guarantee of approval. Neighborhood Loans, Inc. dba South Texas Lending, NMLS #222982. Equal Housing Lender.