DSCR Loans in McAllen, TX
Loan-size math and qualifying analysis for DSCR financing on McAllen's $229k median home value. Poor fit.
Poor fit for McAllen.
McAllen's low rent-to-price ratio produces DSCR around 0.73 — well below the 1.10-1.25 lender threshold. Appreciation play, not a cash-flow market.
Payment on McAllen's $229k median.
| Median home value (McAllen) | $229,034 |
| Assumed LTV | 78% |
| Loan amount | $178,646 |
| Cash to close (down payment) | $50,388 |
| Assumed rate | 8.50% |
| Term | 30-year amortizing |
| Monthly P&I | $1,374/mo |
Does McAllen pencil?
| Median monthly rent (McAllen) | $1,304/mo |
| Property taxes (est. 1.1%/yr) | −$210/mo |
| Insurance (est. 0.5%/yr) | −$95/mo |
| NOI (before debt) | $999/mo |
| Debt service | −$1,374/mo |
| DSCR | 0.73 |
Most DSCR lenders require DSCR ≥ 1.10 to fund and ≥ 1.20-1.25 for the best pricing tier. McAllen 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 McAllen?
On McAllen's $229k median home value, a DSCR loan at the standard 78% LTV would be approximately $179k, requiring $50k down.
What's the monthly payment on a typical DSCR loan in McAllen?
Fully-amortizing 30-year payment on a $179k DSCR loan at the typical rate of 8.50% would be approximately $1k/month, excluding taxes and insurance.
Is McAllen a good market for DSCR financing?
McAllen's low rent-to-price ratio produces DSCR around 0.73 — 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 McAllen 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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