Best DSCR Lenders in Texas 2026

Find the best DSCR loan lenders in Texas. Compare rates, LTV options, and requirements for investment property financing in Houston and beyond.

Best DSCR Lenders in Texas: 2026 Complete Guide

If you are a real estate investor looking to finance rental properties in Texas, DSCR (Debt Service Coverage Ratio) loans offer a streamlined path to approval. Unlike conventional mortgages, DSCR loans qualify you based on the property's rental income rather than your personal income, making them the preferred financing tool for serious investors.

Texas is a fast-growing market with no state income tax and strong rental demand across multiple metros, and DSCR loans are among the most popular Non-QM products in the state. With 120+ licensed Non-QM lenders operating across Texas, competition keeps rates competitive and terms favorable.

What Is a DSCR Loan?

A DSCR loan measures whether a property's rental income can cover its mortgage payment. The formula is straightforward:

DSCR = Monthly Rental Income / Monthly Mortgage Payment (PITIA)

A DSCR of 1.0 means the rent exactly covers the payment. Most Texas lenders require a DSCR between 1.0-1.20, though some programs accept ratios as low as 0.75 with compensating factors.

Why Texas Is Ideal for DSCR Loans

Texas offers several advantages for DSCR loan investors:

Median home price of $301,000 provides strong entry points for investors
Average rent of $1,650/month supports healthy DSCR ratios
120+ licensed Non-QM lenders create competitive pricing
Strong population growth drives sustained rental demand

Top Texas Markets for DSCR Loans

The strongest DSCR loan markets in Texas include Houston, Dallas, San Antonio, Austin. Each offers different risk-return profiles for investors.

Market	Median Price	Avg Rent	Typical DSCR	Investor Appeal
Houston	$301,000	$1,650	1.15-1.30	High demand, appreciation
Dallas	$255,850	$1,485	1.20-1.35	Strong cash flow
San Antonio	$225,750	$1,320	1.25-1.40	Best cash-on-cash
Austin	$270,900	$1,402	1.15-1.25	Balanced growth

DSCR Loan Requirements in Texas

Minimum Requirements

Credit Score: 620-660 minimum (best rates at 720+)
Down Payment: 15-25% of purchase price
DSCR Ratio: 1.0-1.20 (some programs allow 0.75+)
Property Types: Single-family, 2-4 units, condos, townhomes
Loan Amounts: $100,000 to $3,000,000+
No personal income verification required

Rate Comparison by Credit Score

Credit Score	Typical Rate Range	Max LTV	Notes
740+	7.25-7.75%	80%	Best available terms
700-739	7.50-8.25%	80%	Strong rates
660-699	8.00-8.75%	75%	Standard terms
620-659	8.50-9.50%	70%	Higher down payment

Case Study: Houston DSCR Loan Success

Borrower Profile:
Property: single-family rental in Katy
Loan Amount: $385,000
LTV: 80%
Credit Score: 680
Monthly Rent: $2,400/month
DSCR: 1.22
Approval Time: 21 days from application to closing

This investor qualified based entirely on the property's rental income. No tax returns, no W-2s, no employment verification. The property's cash flow spoke for itself.

How to Choose the Right DSCR Lender in Texas

When comparing DSCR lenders in Texas, evaluate these factors:

Rate competitiveness — Get quotes from at least 3 lenders
LTV limits — Higher LTV means less cash out of pocket
Minimum DSCR threshold — Lower minimums give more flexibility
Closing speed — Top lenders close in 21-30 days
Property type restrictions — Ensure your property type qualifies
Prepayment penalties — Understand the terms before committing

Getting Started with DSCR Loans in Texas

Ready to finance your next Texas investment property? Start by getting pre-qualified with a DSCR lender who understands the Texas market.

[Get Pre-Qualified](/get-started) | [Compare Texas Lenders](/locations/texas) | [DSCR Loan Details](/programs/dscr)

Frequently Asked Questions

What is the minimum DSCR ratio required in Texas? Most Texas DSCR lenders require a minimum ratio of 1.0-1.20. Some programs accept ratios as low as 0.75 with compensating factors such as a higher credit score (700+) or larger down payment (30%+). A ratio of 1.25 or higher typically qualifies for the best rates.

Can I use short-term rental income for a DSCR loan in Texas? Yes, many Texas DSCR lenders accept short-term rental (Airbnb/VRBO) income. Lenders typically use either the property's actual rental history or a third-party rent analysis from services like AirDNA. Short-term rental DSCR loans may require a slightly higher DSCR ratio (1.25+) and larger down payment.

How fast can I close on a DSCR loan in Texas? Top DSCR lenders in Texas can close in 21-30 days from application. The process is faster than conventional loans because there is no income verification, no employment verification, and no tax return analysis. The main timeline drivers are the appraisal and title work.

Do I need to be a Texas resident to get a DSCR loan there? No. DSCR loans in Texas are available to out-of-state investors. The loan qualifies based on the property's income, not your personal residence. Many Texas DSCR borrowers are investors from other states who recognize the strong rental market opportunities.

What property types qualify for DSCR loans in Texas? DSCR loans in Texas are available for single-family homes, 2-4 unit properties, condos (warrantable and non-warrantable), townhomes, and in some cases, 5+ unit commercial properties. Short-term rental properties and vacation homes may also qualify with certain lenders.

Can I get a DSCR loan with a low credit score in Texas? DSCR loans in Texas are available with credit scores as low as 620, though the best rates and terms require scores of 720 or higher. Borrowers with scores between 620-660 should expect higher rates and may need a larger down payment (25-30%) to qualify.

How many DSCR loans can I have at the same time in Texas? There is no limit on the number of DSCR loans you can hold simultaneously in Texas. Unlike conventional loans, which cap at 10 financed properties, DSCR lenders evaluate each property independently. Many successful Texas investors hold 10, 20, or more DSCR loans across their portfolio.

Explore Texas Non-QM Resources

Texas Location Hub

Visit our [Texas Non-QM Lending page](/locations/texas) for a comprehensive overview of Non-QM mortgage options across the state, including lender directories, market statistics, and program comparisons.

Texas City Guides

Explore Non-QM lending options in specific Texas markets:

[Houston Non-QM Lenders](/locations/texas/houston) — Local lender directory, market data, and neighborhood insights
[Dallas Non-QM Lenders](/locations/texas/dallas) — Local lender directory, market data, and neighborhood insights
[Austin Non-QM Lenders](/locations/texas/austin) — Local lender directory, market data, and neighborhood insights

Loan Program Details

[DSCR Loan Program Overview](/programs/dscr) — Full program details, requirements, and rates
[Compare All Non-QM Programs](/compare) — Side-by-side program comparison tool
[Get Pre-Approved](/get-started) — Start your application today

Best DSCR Lenders in Texas 2026