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Investor loans that qualify on the rent · Florida
Florida DSCR Loans
A DSCR loan lets real estate investors qualify on the property’s cash flow instead of personal income. If the rent covers the payment, the deal can work, with no tax returns, no W-2s and no cap on how many properties you finance.
What Is a DSCR Loan?
DSCR stands for debt service coverage ratio. Instead of reviewing your tax returns, W-2s or pay stubs, the lender asks one question: does the rent this property brings in cover its monthly payment? If it does, the loan can be approved on the property’s merits.
That changes who can invest. A self-employed investor whose returns show little taxable income, a buyer whose debt ratio is already stretched by other rentals, or someone who simply wants to keep personal finances out of it can all qualify on the deal instead. Because approval is tied to property performance, DSCR loans remove many of the barriers investors hit with conventional financing, and they scale: each new property qualifies on its own rent.
DSCR loans are non-QM, so each lender writes its own guidelines on ratios, credit, down payment and property types. Matching the deal to the right lender is most of the work, and it is what we do.
How Is a DSCR Calculated?
Divide the property’s monthly rent by its full monthly payment: principal, interest, property taxes, insurance and any association dues, often called PITIA. A result of 1.00 means the rent exactly covers the payment. Above 1.00 the property produces surplus cash flow; below 1.00 the rent falls short.
Example: a rental that brings in $2,500 a month against a $2,000 payment has a DSCR of $2,500 ÷ $2,000 = 1.25. The property earns 25% more than it needs to cover the loan. Most programs look for 1.00 to 1.25 or higher, and some accept less than 1.00 with stronger credit or a larger down payment.
- Loan amount
- $318,750
- Principal and interest
- $2,284
- Full payment (PITIA)
- $3,055
- Rent needed for 1.00
- $3,055
- Rent needed for 1.25
- $3,818
Starting numbers: a $425,000 Miami-Dade single-family rental with 25% down, non-homestead property tax, a landlord insurance policy and an illustrative DSCR rate of 7.750%, about one point above today’s conforming 30-year fixed. DSCR pricing varies by lender, ratio, credit and loan-to-value; change any number to test your own deal.
Today’s Miami-Dade County ratesHow DSCR loans workMore mortgage calculators
DSCR Loan Program Highlights
Typical guidelines for DSCR financing. Exact terms vary by borrower, property and lender, and we compare several.
Income
Qualify on property cash flow. No personal income, tax returns, W-2s or pay stubs.
Down payment
Typically 20% to 30%, or roughly 70% to 80% loan-to-value. More down can offset a lower score or a thinner ratio.
Credit
Scores generally start around 620, with the best pricing at 700 and up and further improvements above 740.
Reserves
About 3 to 6 months of the property’s payment is common, and more for larger loans or several financed properties.
Loan purpose
Purchase, rate-and-term refinance and cash-out refinance, including pulling equity from a property bought with cash.
Ownership
Close in an LLC or other business entity. A personal guarantee is usually required.
Loan structures
30-year fixed, adjustable rates and interest-only options, which can lift the ratio by lowering the payment.
Portfolio growth
No cap on the number of financed properties, unlike the ten-property limit on conventional loans.
Speed
With no income to verify, files often move faster, which helps when competing with cash buyers.
DSCR or a conventional investment loan?
| DSCR loan | Conventional investment loan | |
|---|---|---|
| How you qualify | The property’s rent against its payment | Your personal income, tax returns and total debt ratio |
| Minimum down payment | Usually 20% to 25% | 15% on a single unit, 25% on two to four units |
| Rate | Higher, often by about 1% or more | Lower, with investor pricing adjustments |
| Financed properties | No cap | Up to ten, with growing reserve requirements |
| Title in an LLC | Yes | No, title is in your name |
| Short-term rentals | Common | Limited |
| Prepayment penalty | Often, in exchange for a lower rate | None |
If your tax returns support it and you have fewer than ten financed properties, a conventional loan usually costs less. When they do not, or when the portfolio is growing fast, DSCR wins on flexibility. We price both.
Eligible Property Types
DSCR loans are for investment properties you will not live in, including:
Single-family rentals
The most common DSCR property, and the easiest to appraise for market rent.
Two to four units
Duplexes, triplexes and fourplexes, where several rents carry one payment.
Condos and townhomes
Including many buildings with rental caps or investor concentration that agency loans decline.
Short-term and vacation rentals
Airbnb and VRBO properties, qualified on booking history or market data.
Non-warrantable condos
Condo-hotels and buildings that fail agency review, at lenders that accept them.
Small multifamily and mixed use
Five or more units and certain mixed-use buildings through select programs.
Costs Florida investors should plan for
- No homestead break. Rentals pay property tax without the homestead exemption, and annual assessment increases are capped at 10% instead of 3%. Expect a jump in the first full year after you buy, when the assessment resets to the purchase price.
- Landlord insurance. A rental policy usually costs more than an owner policy, and wind and flood coverage drive the total along the coast.
- Association rules. Many Florida condos and HOAs restrict rentals by lease length or number of rented units. Check before you offer, especially for short-term rentals.
- Local short-term rental rules. Several Florida cities register, limit or ban short-term rentals in certain zones, and state tourist development and sales taxes apply to stays of six months or less.
- Florida mortgage taxes. Note stamps (0.35%) and intangible tax (0.2%) apply to every new DSCR loan, including cash-out refinances.
Who Is Best Suited for a DSCR Loan?
DSCR loans fit investors who focus on property performance rather than personal income, and they work best in markets with steady rental demand, which describes most of Florida.
Real estate investors
Buying a first rental or adding to a growing portfolio, without debt ratio limits from the properties you already own.
Self-employed borrowers
Business owners and contractors whose deductions shrink taxable income can qualify on the property instead. For a home you will live in, see bank statement loans.
Short-term rental investors
Vacation and Airbnb properties, qualified on booking history or market rent data in Florida’s strongest rental markets.
DSCR loans in your Florida city
Each city guide works through a real local example with that county’s taxes, insurance and typical rents, and includes the calculator preloaded with local numbers.
Broward
Fort Lauderdale Hollywood Pembroke Pines Miramar Coral Springs Davie Plantation Sunrise Weston Parkland Pompano Beach Deerfield Beach Hallandale Beach Lauderdale Lakes
Palm Beach
Treasure Coast
Tampa Bay
Central Florida
Southwest Florida
Northeast Florida
North Florida
Get Approved for a DSCR Loan Today
Ready to finance your next investment property? Send us the address or the numbers and we will run the ratio, compare DSCR lenders and show the rate with and without a prepayment penalty.
- The ratio and rent needed before you offer
- Several DSCR lenders compared
- LLC, short-term rental and portfolio deals welcome
Prefer to talk it through? Call 954-494-7288.
Tell us about the loan
No credit pull. A loan officer follows up, usually the same day.
DSCR Loan FAQs
What is a DSCR loan?
A real estate investment loan where qualification is based on the rental income of the property rather than your personal income. The lender checks whether the property generates enough cash flow to cover its mortgage payment.
What DSCR ratio do lenders require?
Most lenders look for 1.00 to 1.25 or higher, depending on the property and loan structure. 1.00 means the rent covers the payment; higher ratios earn better pricing. A few programs accept ratios below 1.00 with more down and stronger credit.
Can I use a DSCR loan for Airbnb or short-term rentals?
Yes. Many lenders allow short-term rentals, using either 12 months of actual booking income from platforms like Airbnb and VRBO or a market rent estimate for short-term use.
How much down payment do I need?
Most DSCR programs ask for 20% to 30% down, about 70% to 80% loan-to-value. A larger down payment can offset a lower credit score or a lower ratio.
Do I need cash reserves?
Usually. Lenders typically want about 3 to 6 months of the property’s payment in reserves, more for larger loans or several financed properties. Cash-out proceeds can count toward reserves at some lenders.
Do DSCR loans require tax returns?
No. DSCR loans do not require tax returns, W-2s or pay stubs. Qualification is based on the property’s income, your credit and your assets.
Is there a limit to how many DSCR loans I can have?
No. Unlike conventional loans, which cap financed properties at ten, DSCR lenders do not limit the number of properties you finance, which is why portfolio investors rely on them.
What types of properties qualify?
Single-family rentals, condos and townhomes, two to four unit properties, vacation rentals, non-warrantable condos and, with select lenders, small multifamily and certain mixed-use properties.
Can I close in an LLC?
Yes. DSCR loans can usually close in the name of an LLC or other business entity, one reason they are popular with investors. A personal guarantee is usually still required.
Are there prepayment penalties?
Many DSCR loans include a prepayment penalty for the first one to five years, often in exchange for a lower rate. Options with a shorter penalty or none are available at a higher rate, and we review the choices with you before you commit.
From Florida investors
What Florida borrowers say after closing with On Mortgage. Five stars on Google (130 reviews) and Zillow (92 reviews).
“Caroline Da Silva from Miami Mortgage Brokers just got us approved for our first mortgage, and we would definitely work with her again after this experience! From the moment our broker connected us with Caroline, she was always several steps ahead throughout the process. We were impressed that Miami Mortgage Brokers had us clear to close a week early,...”
“Chris was outstanding throughout the entire transaction! Always accessible and was able to provide the best financing option when others could not! I would highly recommend him and hope to do more transactions with him.”
“I recently had the pleasure of working with Chris as my loan officer, and I cannot speak highly enough of his exceptional service. He guided me through every step with clarity and patience. What truly sets Chris apart is his remarkable efficiency: not only was he incredibly responsive to my inquiries, but he also expedited the loan process, resulting in the...”
Let the rent qualify your next property
Send us the deal and we will run the ratio, compare DSCR lenders and show you the rate, the cash needed and the rent required to close.