No W-2. No tax return. No explanation of business structure. No DTI. The SFR investment property qualifies the same way whether it’s the investor’s first acquisition or their 15th: on its own economics.
SFR Investment? Run Your DSCR in 60 Seconds.
Go Deeper
Mbanc NMLS #38232 | Equal Housing Opportunity Lender
SFR DSCR Program Parameters
Credit score: 640 minimum. 80% LTV available at 660+. Best pricing at 720+.
Maximum LTV by credit/DSCR tier:
– DSCR ≥ 1.25, 640+ credit: 80% LTV
– DSCR ≥ 1.00, 660+ credit: 80% LTV
– DSCR ≥ 1.00, 640–659 credit: 75% LTV
– DSCR 0.75–0.99, 700+ credit: 70% LTV (no-ratio program)
Loan amounts: $150,000 minimum. $4,000,000 maximum.
Down payment: 20% at standard (80% LTV). 25% at 75% LTV. 30% at no-ratio (70% LTV).
Reserves: 3–6 months PITIA post-close at standard program. 12 months at no-ratio.
Loan terms: 30-year fixed, 40-year fixed, 5/6 ARM, 7/6 ARM, interest-only available at 660+ credit.
No personal income documentation. No W-2. No tax return. No bank statements.
The DSCR Calculation for SFRs
DSCR = Monthly Qualifying Rent ÷ Monthly PITIA
Monthly Qualifying Rent:
For a property with an existing tenant: the lower of the current lease rent or the appraiser’s market rent determination.
For a vacant property: the appraiser’s market rent analysis based on comparable active leases in the same neighborhood.
Monthly PITIA:
– P = Principal (from amortization schedule)
– I = Interest (from amortization schedule)
– T = Property taxes (county appraisal district rate on the specific parcel ÷ 12)
– I = Homeowners insurance (annual premium ÷ 12)
– A = HOA dues (if applicable; monthly figure)
The most common DSCR calculation error: using an estimated insurance figure or county average tax rate rather than confirmed figures. Florida insurance variability and Texas property tax rate variability can move DSCR by 10–25 basis points versus estimates. Always use confirmed numbers.
SFR DSCR: What Works by Market
The SFR DSCR market is highly geography-dependent. Markets where purchase prices have stayed accessible relative to rents produce the best DSCR ratios:
Strongest SFR DSCR markets (1.10–1.40 DSCR consistently achievable):
San Antonio military corridor, Memphis workforce housing, Dallas East (Mesquite/Garland/Rowlett), Jacksonville military-adjacent, Carolinas outer-ring suburbs (Concord, Clayton, Gastonia)
Standard DSCR markets (1.00–1.15 achievable with price discipline):
Tampa Bay suburbs (Riverview, Wesley Chapel), Nashville outer ring (Murfreesboro, Smyrna), Atlanta outer ring (Forsyth County, Douglas County), Fort Worth north suburbs
No-ratio or borderline standard (0.75–0.99 typical):
Austin core, Orlando long-term rental urban, Raleigh/Durham inner ring, Fort Lauderdale urban
No-ratio standard (0.60–0.90 typical):
LA metro, Bay Area, San Diego coastal, Miami Beach/Brickell, Seattle, NYC boroughs
The Complete SFR DSCR Deal — Step by Step
Deal example: A self-employed contractor in Charlotte targeting a Concord SFR as the first of several planned acquisitions.
Property identified: 3BR/2BA SFR in Concord, NC. Purchase price: $310,000. Currently occupied — lease at $2,100/month, 5 months remaining.
Step 1 — Confirm qualifying rent. Current lease: $2,100/month. Call loan officer to request an estimated appraiser market rent analysis. For a quick estimate: pull 3–5 active leases in the same neighborhood from Zillow or Realtor.com for comparable 3BR SFRs. Market appears to support $2,200–$2,300/month. Qualifying rent will be $2,100 (lower of current lease and market).
Step 2 — Estimate PITIA. Loan officer provides:
– 80% LTV loan: $248,000
– P&I at current DSCR rate (7.875%, 30-year): ~$1,797/month
– Cabarrus County taxes (0.92% on $310K): $237/month
– Homeowners insurance estimate: $94/month
– HOA: $0
– Estimated PITIA: $2,128/month
Step 3 — Calculate DSCR. $2,100 ÷ $2,128 = 0.99. One basis point below standard.
Step 4 — Adjust. Two options: (a) Confirm the actual parcel tax rate — county average sometimes overstates individual parcel rate. Actual parcel: 0.89% ($230/month). Revised PITIA: $2,121. DSCR: $2,100 ÷ $2,121 = 0.99. Still tight. (b) Increase down to 22%: loan drops to $241,800. P&I: $1,752/month. PITIA: $2,076. DSCR: $2,100 ÷ $2,076 = 1.01. Standard.
He increased down to 22%. Closed in 22 days. No income documentation.
Post-close: Tenant renewed at $2,250. DSCR: $2,250 ÷ $2,076 = 1.08.
Frequently Asked Questions
What is the minimum property value for a DSCR SFR loan? Minimum loan amount is $150,000. For a property at 80% LTV: minimum purchase price $187,500.
Does the SFR need to be currently rented? No. Vacant properties can use appraiser market rent analysis as qualifying income.
Can I use projected rent from a property I plan to renovate? DSCR requires the property to be in rentable, habitable condition at the time of application. Post-renovation projected rent is not the basis — the property must qualify in current (or close-to-current) condition.
Is the DSCR SFR program available in all states? Mbanc offers DSCR in 46 states. Confirm state availability for your target market.
What is the difference between SFR DSCR and 2-4 unit DSCR? SFR maximum LTV is 80%. 2-unit: typically 75–80%. 3-4 unit: typically 70–75%. All units’ combined rent is used for the DSCR numerator on multi-unit properties.
About the Author: Mayer Dallal — Managing Director, Mbanc NMLS #38232. [mbanc.com/blog/author/mayer-dallal/]
Not a commitment to lend. Mbanc NMLS #38232 | Equal Housing Opportunity Lender
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SFR DSCR: The Complete Market Selection Guide
Single-family residential (SFR) is the most common DSCR loan property type. Simple ownership, single tenant, straightforward management. The challenge: not every market produces viable SFR DSCR. The property tax rate and insurance cost determine whether SFR DSCR works in a given market.
The SFR DSCR formula applied:
Monthly qualifying rent ÷ (P&I + monthly taxes + monthly insurance) = DSCR.
Best SFR DSCR markets nationally (2026):
Rutherford County TN (Murfreesboro, Smyrna, LaVergne):
$290K–$420K properties. Rents $1,950–$2,500/month. 0.76% taxes. DSCR 1.01–1.18 at 80% LTV. Consistently standard. The national benchmark.
Union County NC (Monroe, Waxhaw, Indian Trail):
$260K–$370K properties. Rents $1,850–$2,300/month. 0.76% taxes. DSCR 0.98–1.12. Borderline to solid standard.
Cabarrus County NC (Concord, Kannapolis):
$270K–$380K. Rents $1,900–$2,400/month. 0.92% taxes. DSCR 1.00–1.15. Reliable standard.
Cherokee County GA (Canton, Woodstock):
$280K–$400K. Rents $1,900–$2,400/month. 0.90–1.10% taxes. DSCR 1.01–1.12.
Duval County FL (Jacksonville):
$255K–$385K. Rents $1,750–$2,300/month. 1.2–1.4% taxes + higher insurance. DSCR 0.90–1.05. Military anchor demand.
Markets where SFR DSCR doesn’t work:
Cook County IL (2.45%): 0.55–0.75 DSCR on typical SFRs.
Dallas County TX (2.15%): 0.82–0.95 DSCR — no-ratio territory.
LA County CA (1.2% taxes but extreme price-to-rent compression): 0.45–0.65 DSCR.
Miami-Dade FL (1.4–1.6% + coastal insurance): 0.65–0.85 DSCR with HOA.
The SFR investor’s screening process:
Before making an offer on any SFR: (1) Confirm property tax rate and current assessed value. (2) Get an insurance quote. (3) Research rental comps on Rentometer or Zillow Rentals. (4) Run the DSCR formula. Properties that don’t produce at least 1.00 DSCR at 80% LTV are no-ratio territory — budget for 70% LTV and higher rate.
Not a commitment to lend. Mbanc NMLS #38232 | Equal Housing Opportunity Lender
The SFR DSCR investor’s core discipline: run the DSCR math before making an offer. Identify the county tax rate, get an insurance estimate, pull rental comps, calculate qualifying income, divide by PITIA. If the number is below 0.75 — pass. The market, not the property, determines DSCR viability.