DSCR Loans in Texas
Texas's typical home costs about $299K and rents near $1,560. The state is still one of the best places in the country to build a DSCR portfolio, but a rental pays about 1.90% in property tax with no homestead exemption, so the tax bill, not the price, decides every file.
Texas DSCR Loan Market
Texas is still one of the busiest DSCR states in the country, with no state income tax, deep job growth across four major metros, no rent control, and a legal system that favors owners. The typical home runs about $299K with rent near $1,560.
The catch is property tax. A rental pays about 1.90% effective, not the 1.40% base, because investors get no homestead exemption, now $140,000 for school taxes, and no 10% homestead appraisal cap. Insurance averages about $410 a month, with hail inland and wind on the coast. Together those lines push a median house at 20% down well below 1.0.
The answer is market selection and structure. El Paso and San Antonio trade below the state median with steady military demand from Fort Bliss and Joint Base San Antonio, and investors there often scale with blanket portfolio loans. The sample deal below finances four El Paso rentals on one interest-only loan with 30% down. Dallas, Houston, and Austin offer appreciation with thinner ratios, and Austin regulates short-term rentals by type.
Top Investor Cities
| City | Median Price | Rent | DSCR |
|---|---|---|---|
| Dallas-Fort Worth | $301K | $1,600 | 0.62x |
| Houston | $262K | $1,540 | 0.67x |
| San Antonio | $247K | $1,390 | 0.64x |
| Austin | $497K | $1,590 | 0.40x |
| El Paso | $238K | $1,520 | 0.72x |
Monthly tax on $299,000 property: $473/mo
8 DSCR Loan Programs for Texas Investors
Standard DSCR
The most popular option. 20% down, 660+ credit.
No-Ratio DSCR
No minimum DSCR required. 30% down.
Interest-Only DSCR
Lower monthly payments for better cash flow.
STR DSCR
Use projected Airbnb/VRBO income to qualify.
Foreign National DSCR
No SSN or US credit history required.
Bank Statement DSCR
Hybrid qualification for self-employed investors.
Portfolio DSCR
Finance multiple properties under one loan.
Bridge-to-DSCR
Purchase, rehab, then refinance into DSCR.
DSCR Loan Requirements in Texas
Licensing & Regulatory
Loans in Texas are originated by a licensed DSCR broker matched to your state. The matched broker holds the required state license; DSCRBroker.com is not the originator.
All lending decisions and terms are determined solely by the matched broker and their wholesale lending partners.
Common Property Types
- Single-Family Rentals
- Condos/Townhomes
- Small Multifamily (2-4 Units)
- New Construction Rentals
- Short-Term Rentals
Down Payment & LTV
- Standard DSCR: 20% minimum down (80% LTV)
- No-Ratio DSCR: 30% minimum down (70% LTV)
- 30%+ down unlocks No-Ratio DSCR programs and broader lender access
Appraisal & Rent Schedule
- Form 1007 rent schedule required with appraisal
- Appraisal estimates market rent for DSCR calculation
- STR properties: AirDNA projected income accepted
Sample DSCR Deal in El Paso, Texas
Portfolio (4 SFRs, blanket loan)
Purchase in El Paso, Texas
Monthly Breakdown
This borrower closed in 38 days with no income verification, no tax returns, and no employment check.
Results may vary. This is a representative example, not a guarantee of future performance.
This deal example is for illustrative purposes only and is based on representative scenarios across our broker network. Actual loan terms, approval, and closing depend on your full credit profile, property details, appraisal, and the matched lender's specific guidelines. This is not a loan offer or commitment to lend.
DSCR Loan Questions for Texas Investors
Because the big Texas tax breaks belong to homesteads. An owner-occupant gets a $140,000 school-district homestead exemption and a 10% annual cap on appraisal increases. A rental gets neither, so it pays the full combined rate of the county, city, school district, and special districts on its full appraised value. That is why this page uses about 1.90% effective instead of the 1.40% base. Some Houston-area and suburban districts run higher. Your specialist should use the actual rates for the address.
No. Texas Constitution Section 50(a)(6) governs cash-out and home equity loans on a homestead, meaning your primary residence. It does not apply to a non-homestead investment property, so a DSCR cash-out refinance on a rental follows the lender's investor guidelines instead. It is a common misconception, and it trips up investors who assume the 80% homestead limit applies. Make sure the property is not claimed as your homestead, since that designation changes which rules apply.
The state does not restrict them generally, so cities set the rules, and they vary widely. Austin regulates by type, with separate rules for owner-occupied and non-owner-occupied rentals, and its Type 2 rules limit non-owner-occupied rentals in residential areas. Dallas's attempted ban has been tied up in court, and Houston began requiring registration in 2026. Many HOAs and deed restrictions prohibit short stays. Check the city guide for your market before you count nightly income.
A blanket or portfolio DSCR loan finances several rentals on one note, qualified on their combined rent against the combined payment. That simplifies closing and ownership, with one payment instead of four, and can help a portfolio where one property is weaker than the others. The tradeoffs are cross-collateralization, so selling one property usually requires a partial release, plus minimum property counts or loan sizes that vary by lender. The sample deal below puts four El Paso rentals on one interest-only loan.
Two of the best in the country. Fort Bliss drives a large, steady rental market in El Paso, and Joint Base San Antonio does the same across San Antonio, with prices in both cities below the Texas median. Service members on set tours often prefer renting, and housing allowances give them predictable budgets. Turnover clusters in summer, and some neighborhoods lean heavily on military tenants. Qualify on market rent from the appraisal, and buy homes civilians would rent too.
DSCR Loans by City in Texas
City-level market data, submarkets investors target, worked deal examples, and local rules for Texas's top rental markets.
Dallas
0.88xFort Worth
0.83xHouston
0.87xSan Antonio
0.83xAustin
0.62xEl Paso
0.83xCorpus Christi
0.88xLubbock
0.80xKilleen
0.75xWaco
0.88xGalveston
0.67xArlington
0.80xFound your Texas market?
The city guides above get you to a shortlist. Your matched specialist takes it from there and structures the file around the property's rent, not your tax returns. 2 minutes. No SSN. No credit pull.
Match Me With a SpecialistLoans in Texas are originated by a licensed DSCR broker matched to your state. The matched broker holds the required state license; DSCRBroker.com is not the originator. The matched broker is not affiliated with DSCRBroker.com except as a participating broker in our matching network. All lending decisions and terms are determined solely by the matched broker and their wholesale lending partners.