Bank Loan

DSCR Loan in Florida: Get Rich Quick! (Requirement & Rates)

Published On January 5, 2024

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Thinking about investing in real estate in Florida? The DSCR loan might be just what you need. It is made for real estate investors, and the best part is, you don’t need to verify your personal income. Instead, your rental income from the property you are financing is what matters.

Curious about how to get a DSCR loan in Florida? This article explaining the process and why choosing a DSCR loan could be a smart move for your next investment.

What is the DSCR Loan in Florida?

DSCR Loan Program is a special loan for people who are looking to invest in real estate. What makes it unique is unlike regular loans that check your personal income, the DSCR loan focuses on how much money the property itself is making.

When you apply for a mortgage, you will need to show things like tax returns and proof of income. But not with the DSCR loan in Florida. It is all about the property’s cash flow – how much money it is bringing in.

In Florida, lenders use the Debt Service Coverage Ratio (DSCR) to figure out if you can pay back the loan. This is great news for investors in Florida who might find it tricky to meet the usual income checks.

What are the key features of the DSCR Loan Florida?

  • Unlike regular loans, DSCR loans care more about how much money your property can make (we call it Debt Service Coverage Ratio or DSCR). This is a game-changer, especially if your credit score is not perfect or your personal income is on the low side.
  • You can get loans as hefty as $5 million, and guess what? You may need to put down just 20% or even less.
  • Forget about proving your income or job details. These loans are all about your property’s cash flow, making life simpler, especially for freelancers or those with not-so-fancy income paperwork.
  • DSCR loans get you back when you need extra cash. You can pull out more cash for sprucing up your property.
  • Choose how you want to proceed– fixed-rate or adjustable-rate mortgages, interest-only options, and more. It is like a real estate buffet tailored to your style.

Eligibility Criteria for a DSCR Loan Florida

  • Your property needs to generate enough income to cover at least 75% of your debt obligations. In simple terms, it should be a money-making machine.
  • All kinds of properties are welcome, but they should be in decent shape or have a plan for renovations.
  • Your property’s revenue minus expenses should leave you with a good sum to cover up the debts.
  • Aim for a credit score of 680 or higher (FICO). 
  • Keep the loan amount at 80% or less of your property’s value.
  • Your property’s income should comfortably cover interest payments. 
  • Stick to economically stable and growing areas.
  • Get your property appraised to determine its value and condition. 
  • Save up some cash for unexpected property expenses.
  • Make sure your property follows all local rules and regulations. 

How does a DSCR Loan Florida work?

To get a DSCR loan in Florida, your property’s income must outshine its debts. Simply put, it should make enough money to cover mortgage payments. No need for the usual paperwork hassles like W2s, income proofs, or bank statements. This loan cares about your property’s income potential, not your paycheck.

Minimum DSCR for Approval:

Your property’s Debt Service Coverage Ratio (DSCR) is crucial. Ideally, it should be 1 or higher. Even if it is less, some lenders might still consider you based on your unique situation, credit history, and a chunky down payment.

  • If DSCR < 1: Possible with a hefty 40% down payment.
  • If DSCR = 1: Possible with a more reasonable 20%-25% down payment.
  • If DSCR > 1: Ideal with a 20%-25% down payment.

DSCR Loan Florida Requirements:

Getting the green light for a DSCR loan in the Sunshine State comes with a few prerequisites:

  • Credit Score of 620: Aim for a credit score of 620. Some lenders might cut you slack with a bit lower score but expect higher down payments and interest rates.
  • Down Payment of 20%: Get ready to drop a down payment of 20-25%. The exact amount can vary based on the lender, your DSCR ratio, and your credit score.
  • DSCR Ratio of 1: Ideally, your property’s DSCR should be 1 or higher for smooth sailing. Some lenders might bend the rules a bit, but be ready for steeper interest rates and a heftier down payment.

How to Apply for a DSCR Loan Florida?

To apply for the DSCR loan process is very simple. You just have to follow the given simple step:

Step 1: Complete the DSCR loan application.

Apply for your DSCR mortgage loan and get the investment property appraised, including expected market rent.

Your loan officer will check your credit to ensure you meet the minimum qualifications.

Step 2: Move into processing.

Once your application is complete, your DSCR mortgage moves into processing.

DSCR mortgage processing is simple since the focus is on investment property quality and rental income potential.

No tax returns, pay stubs, employment history, or personal income history are needed.

Step 3: Close and get funds.

After processing, your DSCR loan moves into underwriting and quality control before being funded.

You will cover your down payment and fees.


Florida’s real estate market has a history of steady growth. Even with higher rates, you can still get a good return on investment. If rates drop later, you can consider a cash-out refinance for lower rates. Building equity now sets the stage for future benefits. For smart investors who know the market ropes and can handle initial costs, buying property in Florida adds value to their investment portfolio. DSCR loans offer a great way to finance your Florida real estate venture. Teaming up with an experienced lender makes property purchase and rental income generation quick and hassle-free. It is a strategic step for long-term gains.

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Debt Service Coverage Ratio (DSCR) is a money measure that checks how much money a property makes compared to its loan payments. Lenders usually want a DSCR of at least 1.2 to 1.25. This means the property needs to earn at least 120-125% of the yearly loan payments to meet the lender’s requirements.

Yes, there are. When you get a DSCR loan, you’ll need to cover closing costs, which typically vary between 2% and 5% of the entire loan amount. For instance, if you take out a $1 million DSCR loan, your closing costs could be anywhere from $20,000 to $50,000.

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