DSCR Loans in Houston, TX
Loan-size math and qualifying analysis for DSCR financing on Houston's $265k median home value. Poor fit.
Poor fit for Houston.
Houston's low rent-to-price ratio produces DSCR around 0.75 — well below the 1.10-1.25 lender threshold. Appreciation play, not a cash-flow market.
Payment on Houston's $265k median.
| Median home value (Houston) | $265,062 |
| Assumed LTV | 78% |
| Loan amount | $206,749 |
| Cash to close (down payment) | $58,313 |
| Assumed rate | 8.50% |
| Term | 30-year amortizing |
| Monthly P&I | $1,590/mo |
Does Houston pencil?
| Median monthly rent (Houston) | $1,549/mo |
| Property taxes (est. 1.1%/yr) | −$243/mo |
| Insurance (est. 0.5%/yr) | −$110/mo |
| NOI (before debt) | $1,196/mo |
| Debt service | −$1,590/mo |
| DSCR | 0.75 |
Most DSCR lenders require DSCR ≥ 1.10 to fund and ≥ 1.20-1.25 for the best pricing tier. Houston medians fall below typical lender DSCR floors — a DSCR loan will only work on properties materially below median or with above-market rent.
DSCR financing — the mechanics.
A non-QM mortgage product where the lender computes Debt Service Coverage Ratio = NOI ÷ debt service. If DSCR clears their threshold (1.10-1.25 typical), the loan funds regardless of the borrower's W-2 income, DTI, or tax returns. The property qualifies the loan.
Lender requires: 660+ FICO (most), 25% down (typical), 6 months of debt-service reserves, signed lease or projected market rent supported by Form 1007 appraiser-rent comps. Closing in 21-35 days standard.
How Texas law affects this loan.
Texas foreclosure timeline: non-judicial, ~41 days from notice to sale. See full DSCR in Texas breakdown.
Frequently asked.
What's the typical DSCR loan size for a property in Houston?
On Houston's $265k median home value, a DSCR loan at the standard 78% LTV would be approximately $207k, requiring $58k down.
What's the monthly payment on a typical DSCR loan in Houston?
Fully-amortizing 30-year payment on a $207k DSCR loan at the typical rate of 8.50% would be approximately $2k/month, excluding taxes and insurance.
Is Houston a good market for DSCR financing?
Houston's low rent-to-price ratio produces DSCR around 0.75 — well below the 1.10-1.25 lender threshold. Appreciation play, not a cash-flow market.
What credit and reserves do DSCR lenders require for Houston properties?
Lender requires: 660+ FICO (most), 25% down (typical), 6 months of debt-service reserves, signed lease or projected market rent supported by Form 1007 appraiser-rent comps. Closing in 21-35 days standard.
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