![DSCR Loan in Texas: Qualify with Rental Income [2025]](https://homeabroadinc.com/wp-content/uploads/2023/01/DSCR-Loans-Texas-500x250.jpeg)
Key Takeaways:
1. Thanks to its strong rental market, zero state income tax, and landlord-friendly laws, Texas is one of the most sought-after investment destinations for US real estate investors.
2. Texas is also a top destination for foreign real estate investors, including investors from India and Mexico. [Source: NAR]
3. HomeAbroad Loans provides customized DSCR loans with competitive interest rates, allowing both US and foreign investors to secure financing based on the property's income rather than personal income.
4. With DSCR loans from HomeAbroad, investors can finance a range of property types, using both short-term and long-term rental income to qualify.
Table of Contents
What if your next investment property could qualify for a loan based on its own income? That’s exactly how DSCR loans work. By focusing on the property’s rental income rather than your personal finances, they make it easier to fund real estate deals that generate steady cash flow.
With an average home value of $306,581 and an average rental yield of 7.4%, Texas offers strong returns for real estate investors. (Source: Zillow) Cities like Houston, San Antonio, and Dallas provide consistent rental demand and diverse property options.
At HomeAbroad, we specialize in helping investors secure DSCR loans tailored to their goals. With our deep industry expertise and AI-powered investment property search engine, we make it easy to find the right property and secure financing.
Get started today and take the first step toward building your real estate portfolio in Texas.
What is a DSCR Loan?
A Debt Service Coverage Ratio (DSCR) loan is a mortgage option designed specifically for real estate investors. Unlike traditional loans that require extensive income documentation, DSCR loans focus on a property’s ability to generate enough rental income to cover the monthly mortgage payment.
This means your loan approval depends more on the property’s financial performance than your personal income or employment history, making it ideal for self-employed investors or those with non-traditional income sources.
At HomeAbroad, we help both local and global investors secure DSCR loans tailored to their needs. With our experience in investor-focused financing, we make the mortgage process smooth and flexible, even if you don’t have a US credit history.
How to Calculate DSCR Loan
Understanding how to calculate the Debt Service Coverage Ratio (DSCR) is essential when applying for a DSCR loan. This key metric helps lenders determine if a rental property generates enough income to cover its loan obligations.
The DSCR formula is simple:
Example
Calculating the DSCR Ratio for a Texas Property:
A DSCR of 1.27 means the property generates 27% more income than its monthly mortgage obligations, making it a strong candidate for DSCR financing.
Over the years, I’ve helped many investors successfully secure DSCR loans, even in cases where their properties didn’t meet the standard 1.0 ratio. One investor I recently worked with had a DSCR of just 0.86. I helped him secure our No-Ratio DSCR option.
At HomeAbroad, we offer “No Ratio DSCR loans” for properties with a DSCR below 0.75, allowing you to secure financing even if your rental income doesn’t fully cover debt obligations. However, this option requires a larger down payment and comes with higher interest rates to mitigate the additional risk.
DSCR Loan interest rates in Texas
DSCR loans offer flexible qualification by focusing on the property’s rental income instead of your personal income. Because of this added flexibility, interest rates are generally 1% to 2% higher than conventional mortgage rates. Check the latest DSCR loan interest rates here.
DSCR Loan Requirements in Texas
HomeAbroad offers DSCR Loans tailored to unique need of both domestic and foreign investors. here are the requirements for each:
| Features | Local Investors | Global Investors |
|---|---|---|
| DSCR Ratio | 1 or Higher (No Ratio DSCR Program Available) | >= 1 for best terms, <1 eligible with higher down payment |
| Credit Score | Minimum 620 | No US credit needed |
| Down Payment | 20% | 25% |
| LTV Ratio | Up to 80% for Purchase and Rate/Term Refinance, up to 75% for Cash Out Refinance | Up to 75% for Purchase and Rate/Term Refinance, up to 70% for Cash Out Refinance |
| Cash Reserves | 2 months | 6 months |
| Property Use | Investment properties (residential and commercial) | Investment properties (residential and commercial) |
| Loan Amount | $75K – $10M | $75K – $10M |
With deep expertise in working with both local and global investors, HomeAbroad provides personalized lending solutions, trusted guidance, and end-to-end support, making real estate investing in Texas both strategic and stress-free.
Where We Lend DSCR Loan in Texas
- Dallas
- Houston
- Austin
- San Antonio
- El paso
- McAllen
- Fort Worth
- Round Rock
- Frisco
- Brownsville
- Beaumont
- Lubbock
- Plano
- Sugar Land
- Amarillo
- Laredo
Nothing simplifies the investment process like witnessing it in action. Here’s how we helped one of our clients successfully grow his rental portfolio in Texas using DSCR loans from HomeAbroad Loans.
How to Grow Your Rental Potential in Texas with DSCR Loans
John Davis, a seasoned real estate investor based in California, identified the booming Texas real estate market as the perfect place to expand his portfolio.
Case Study: John Davis Expands His Real Estate Portfolio in Texas
Investor Profile:
Name: John Davis (name changed for privacy)
Borrower Location: California
Investment Target: Multi-family rental property in Austin, Texas
Purchase Price: $500,000
Monthly Rent: $4,118 (LTR)
Annual Rent: $49,414
Credit Score: 700
DSCR: 1.2 (Calculation shown below)
Financing Solution:
John secured a DSCR loan from HomeAbroad Loans, focusing on the rental income of the property rather than his personal income or extensive documentation.
Financial Metric | Amount (USD) |
|---|---|
Loan Amount | $400,000 |
Monthly Mortgage Payment | $2,398 |
Annual Mortgage Payment | $28,778 |
Annual Property Tax | $9,900 |
Annual Insurance Cost | $2,500 |
Total Annual Debt Service (PITIA)* | $41,178 |
Annual Rental Income | $49,414 |
John’s DSCR = $49,414 / $41,178
DSCR = 1.2
Investment Benefits:
➡️Austin’s 5-year appreciation: ~44%
➡️Strong rental demand led to a steady increase in net operating income.
➡️The interest-only loan option allowed John to maintain positive cash flow and minimize out-of-pocket expenses.
Outcome:
With the help of HomeAbroad Loans’s DSCR loan, John successfully leveraged the property’s income to cover mortgage payments, maximizing returns and expanding his real estate portfolio with ease.
Top Places to Invest in Texas with a DSCR Loan
Texas offers a wide range of cities that are ideal for both short-term and long-term rental strategies, making it a great fit for investors using DSCR loans. Whether you’re targeting steady monthly income or strong vacation rental demand, there’s a city in Texas that aligns with your investment approach
Here are some of the top-performing cities in Texas for real estate investment:
City | Rental Type | Rental Yield |
|---|---|---|
Austin | Short-term | 9.8% |
Houston | Long-term | 8.2% |
El Paso | Long-term | 8.1% |
San Antonio | Long-term | 7.9% |
Dallas | Long-term | 7.7% |
Need help finding the right investment property? Our AI-powered platform, Ziffy.ai, makes it easy to discover high-performing rental properties in Texas or anywhere across the US.
Get a HomeAbroad DSCR Loan in Texas
At HomeAbroad, we make it easy for real estate investors to secure DSCR loans in Texas. Whether you’re buying your first rental or scaling your portfolio, our loan programs are designed to match your unique goals, with no personal income verification and no US credit history required.
Why Investors Choose HomeAbroad:
- Flexible DSCR loan programs with fast approvals
- No-Ratio DSCR options for properties with DSCR below 1.0
- Support with setting up LLCs, US bank accounts, and more
- AI-powered property search engine, to help you find high-performing investments across Texas
Get a DSCR loan with HomeAbroad today and start growing your real estate portfolio!
Pre-qualify for a DSCR Loan in a Few Clicks.
No Paystubs, W2s, or Tax Returns Required.
FAQs
Can you get a DSCR loan in Texas?
Yes, DSCR loans are available in Texas and are a popular option for real estate investors looking to finance rental properties. At HomeAbroad Loans, we offer tailored DSCR loan options for a variety of investment properties, including multi-family units, single-family homes, and short-term rentals.
Who is eligible for a Texas DSCR loan?
To qualify for a Texas DSCR loan, you need to demonstrate strong rental income from your investment property. Unlike traditional loans, DSCR loans do not focus on your personal income or credit score, but instead rely on your debt service coverage ratio (DSCR) to determine eligibility. At HomeAbroad Loans, we offer loans for borrowers with DSCR ratios as low as 0.75 and even No Ratio DSCR loans in certain cases.
What are the interest rates for DSCR loans in Texas?
Interest rates for Texas DSCR loans vary depending on the loan amount, LTV ratio, and your DSCR. Generally, higher DSCRs can result in better loan terms. At HomeAbroad Loans, we offer competitive interest rates to help investors maximize their cash flow and rental income. Speak to one of our loan officers to get your personalized rate quote here.
How long does it take to get a DSCR loan in Texas?
At HomeAbroad Loans, we streamline the application process, ensuring a smooth experience from loan application to closing. We ensure that the closing happens within 30 days.
At HomeAbroad, we ensure the reliability of our content by relying on primary sources such as government data, industry reports, firsthand accounts from our network of experts, and interviews with specialists. We also incorporate original research from respected publishers when relevant. Discover more about our commitment to delivering precise and impartial information in our editorial policy.
National Association of Realtors: 2024 International Transactions in U.S. Residential Real Estate
Zillow: https://www.zillow.com/home-values/10221/austin-tx/
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