DSCR Scenario Review by State

DSCR program factors can vary by lender program, property type, market conditions, property values, and applicable state requirements. While the basic DSCR formula remains the same, underwriting may differ by lender.

Common State-Specific Variations

• Minimum DSCR Ratio: Typically ranges from 1.0 to 1.25 depending on the state
• Credit Score: Usually 640-680 minimum, varies by state and lender
• Illustrative LTV range: Generally 75-80%, may be lower in high-cost states
• Reserves: Typically 6 months, some states require more
• Property Types: Varies by state - some allow condos, others restrict to SFR only

Common Investor Markets

Some markets are commonly reviewed by real estate investors because of rental demand and investor activity:

• Florida: Investor activity in markets such as Miami, Orlando, and Tampa
• Texas: No state income tax, booming markets in Dallas, Houston, Austin
• Georgia: Atlanta metro drives strong investor demand
• North Carolina: Growing markets in Charlotte and Raleigh-Durham
• Ohio: Strong cash-flow markets in Columbus and Cleveland

Why DSCR Requirements Vary by State

Several factors influence state-specific DSCR requirements:

• State Regulations: Different lending laws and consumer protection rules
• Property Values: Higher-cost states may have stricter requirements
• Market Conditions: Rental demand and vacancy rates vary by location
• Lender Competition: More lenders in active markets may offer better terms