Last updated: August 2025
If you’re a Texas real estate investor looking to expand your rental portfolio without handing over years of tax returns or explaining your day job, a Debt Service Coverage Ratio (DSCR) loan could be your fastest path forward.
Unlike traditional loans, DSCR financing focuses on one thing — whether your property’s rental income can cover the mortgage.
At Salute Mortgage, our veteran-led team combines speed, clarity, and tactical deal structuring to help you get from prequal to keys with fewer delays.
We’ll show you exactly what lenders look for in Texas, common roadblocks to avoid, and how to position your file so you can close quickly and confidently.
What a DSCR Loan Actually Measures
Traditional mortgages dig into your personal income and employment history.
A DSCR loan is different — it’s about the property’s cash flow, not your paycheck. That means the income from the rental itself must support the loan payments.
DSCR formula:
DSCR = Net Operating Income (NOI) ÷ Annual Debt Service
- DSCR of 1.0 = Break-even
- Above 1.0 = Positive cash flow
- Below 1.0 = Negative cash flow
Most Texas lenders want to see a 1.2 or higher to approve the loan, though some allow lower ratios with strong credit or a bigger down payment.
Calculate the DSCR of your project with our easy DSCR calculator.
Let’s Build Your Path to Homeownership
At Salute Mortgage, we combine veteran-led guidance with clear, tactical support—whether you're buying your first home, refinancing, or planning for long-term equity.
Minimum Requirements to Qualify
Even with a property-focused loan, underwriters still have a checklist:
- Credit score: 660–680 minimum (some programs may allow lower)
- Down payment: 20–25% is standard
- Property type: Must be income-producing (single-family, duplex, triplex, or fourplex). Short-term rentals like Airbnbs can qualify if you have a consistent history
- Rent schedule: Form 1007 or a market rent analysis
- Reserves: Typically 3–6 months of PITI (principal, interest, taxes, insurance)
No tax returns, W-2s, or employer calls are required — one of the biggest advantages for self-employed and investor borrowers.
What Documents Are (and Aren’t) Needed
Think of DSCR loans as “low doc,” not “no doc.” Here’s what you skip — and what you still need:
You don’t need:
- W-2s or 1099s
- Pay stubs
- Tax returns
- DTI (debt-to-income) calculation
You do need:
- Lease agreement or projected rental income report
- Property appraisal
- Proof of reserves
- LLC docs if purchasing through an entity
If the unit is already rented, showing a solid rent history improves your chances. For vacant properties, accurate market rent comps are critical.
How to Boost Your DSCR and Qualify Faster
If your DSCR is hovering near the minimum threshold (around 1.0–1.15), here are ways to strengthen your numbers:
- Raise rent before appraisal: If the current lease is under market, renegotiating or using stronger comps can help.
- Lower expenses: Reduce HOA fees, shop insurance, or cut management costs to improve NOI.
- Bring more cash to close: Lowering your loan amount increases DSCR.
- Add a co-borrower: Some lenders allow spouses or business partners on title to strengthen the file.
Ask your lender whether they calculate DSCR using gross rents or net rents — the difference could tip your approval either way.
Common Texas-Specific Pitfalls to Avoid
Texas investors should watch out for these roadblocks:
- Short-term rental income limits: You typically need 12+ months of Airbnb or VRBO income before it counts.
- Overestimating rent potential: Appraisers use hard data and conservative comps, not online estimates.
- Refinancing too early: Many lenders require 3–6 months of ownership before refinancing.
- Skipping reserves: Even a high DSCR can’t replace reserve requirements.
Choosing a Texas Lender That Understands DSCR Loans
Not every lender offers DSCR financing, and even fewer understand how Texas-specific rules — like property tax structures and homestead exemptions — impact your deal.
At Salute Mortgage, we specialize in DSCR loans for Texas investors. We move fast, give you clear numbers from the start, and walk through your file to flag any issues before they cause delays.
From Prequal to Closing: The Usual Timeline
Here’s what to expect once you’re ready to move forward:
- Prequal with rent estimate – Share property info and estimated rents to check your DSCR range.
- Loan application + soft credit pull – Provide basic docs and reserve info (no tax returns).
- Appraisal + rental schedule – Lender orders a full appraisal with a 1007 rent analysis.
- Underwriting review – DSCR confirmed, due diligence completed.
- Clear to close – Typical Texas DSCR loans close in 21–30 days.
Conclusion: Is a DSCR Loan Right for You?
DSCR loans aren’t for everyone — but if your rental property cash flows well and you want to skip the personal income review, they can be a powerful tool.
Whether you’re scaling short-term rentals or adding a long-term hold, this option lets the asset qualify on its own.
Underwriting is faster, but not looser. Prep the property, line up your documents, and understand how your lender calculates DSCR.
With the right team, approval becomes a tactical process — not a guessing game.
Let’s Run the Numbers Together
At Salute Mortgage, we specialize in DSCR loans for Texas investors — from single-family rentals to short-term stays. Our process is built for speed, with clear numbers, straight answers, and a team that treats your loan like it’s our own.
✅ Fast pre-approvals — know your buying power in minutes
✅ No tax returns required — qualify based on the property’s cash flow
✅ Texas market expertise — we understand property taxes, rental rules, and lender expectations
