What is a DSCR loan in Florida? First, meet the pelican
In every Florida rental listing, the rent is the show-off. It's printed big, and it photographs well next to the pool. The monthly cost is the quiet one, and it's a pelican: it looks modest on the dock, then it opens its mouth. (Insurance, mostly. Ask anyone at the boat ramp.)
A DSCR loan is a mortgage for a rental property that a lender sizes on the property's own income. DSCR means debt service coverage ratio: the monthly rent divided by the monthly cost of owning the place, which is principal, interest, property taxes, insurance and any HOA or condo dues. Your W-2s and tax returns stay in the drawer. The rent usually comes from the appraisal: the appraiser compares nearby rentals and records a market rent on Fannie Mae's Form 1007 for a single home, or Form 1025 for two to four units.
In Florida, the cost side is where files are won or lost, because insurance and taxes can be large. That's the pelican's pouch, and it's the part to weigh first. A made-up example: a condo that rents for $2,600 with a monthly cost of $2,300 has a ratio of about 1.13. Put your own numbers in the calculator on this page.
-
Get insurance quotes first
Price wind and, where it applies, flood coverage before you trust any ratio.
-
Estimate the rental's tax bill
Use what the property will owe as a rental, not the seller's bill.
-
Divide rent by monthly cost
That ratio is the first number a DSCR lender reads.
-
Plan your cash to close
Add the down payment, Florida's closing taxes and any reserves.
-
Find the lender that fits
Each lender sets its own rules, so the right match matters.
Who a Florida DSCR loan works for, pelican and all
Good fit
- Vacation-rental buyers, since several lenders publish short-term rentals as eligible and Florida law limits how cities can ban them.
- Self-employed investors whose tax returns understate what they earn, because the rent does the qualifying.
- Condo investors, since several lenders publish condos, including non-warrantable condos, as eligible.
- Investors who want title in an LLC, which many DSCR lenders allow.
- Owners who want to pull equity out of a Florida rental to buy the next one.
Another loan may serve you better
- If you'll live in the home, a loan made for a primary residence fits better, and we can talk through which one.
- If the property needs repairs before it can rent, a short-term loan to buy and fix it often comes first, and a DSCR loan can follow.
- If your income documents qualify you with room to spare, a conventional investment loan is worth comparing on cost.
- If you're buying a large apartment building, a commercial real-estate loan is usually the better tool.
Talk through a Florida rental with us
Send Kelly the property and the rent you expect, and you'll weigh the costs and the lenders together.
Start with the cash: how much down a Florida DSCR loan takes
On a purchase, 20% down is the figure lenders publish most often. Some lenders publish 15% down for files with higher credit scores. Lower credit or a ratio under 1.00 usually means a bigger down payment, so treat 20% as a starting point rather than a fixed bar.
Zero down is the question we hear first, and the honest answer is that we didn't find it. None of the lenders we read publishes a regular DSCR purchase programme with no money down; the lowest down payment we found published was 15%. (We did look. Thoroughly.)
Property type moves the number too. Some lenders cap a condo or a two-to-four-unit purchase at a 75% loan-to-value, which means 25% down.
On a cash-out refinance, there's no down payment. Lenders most often publish a 75% loan-to-value limit, so a quarter of the value stays in the property.
Florida adds two taxes at closing. The documentary stamp tax is 35 cents per $100 borrowed, and it's paid on the mortgage when the mortgage is recorded. The nonrecurring intangible tax on the mortgage is 2 mills, which is $2 per $1,000; the lender owes it but may pass it to the borrower. (Yes, an intangible tax on a very tangible house.) On a made-up $300,000 loan, that's $1,050 in stamps and $600 in intangible tax. They're paid once, at closing, so they change your cash to close, not the monthly ratio.
What this means for you: budget for the down payment plus Florida's closing taxes and any reserves, and you'll know your real cash to close, not a hopeful guess at it.
The fine print: Florida DSCR loan requirements beyond the down payment
A DSCR loan on a one-to-four-unit rental is a non-QM loan: it doesn't follow Fannie Mae or Freddie Mac's rules, or the government home-loan programmes'. No agency sets its requirements, so each lender writes its own, and published rules differ more than most investors expect. Annoying? A little. Useful? Very.
Ratio. Some lenders publish a minimum ratio of 1.00 or higher, some publish programmes down to 0.75, and at least one publishes no minimum at all.
Credit score. Published minimums run from 620 to 680.
Loan size. Published minimum loan amounts mostly run from $100,000 to $150,000.
Reserves. Many lenders want savings left after closing, and how much varies widely.
Terms. The 30-year fixed loan is the standard term lenders publish, and some also publish 40-year, interest-only and adjustable options. Many DSCR loans charge a fee if you pay the loan off in the first few years; how long and how much differ by lender, and some offer loans without one.
Title. Many lenders let you borrow in your own name or through an LLC, and at least one asks for an LLC on every Florida loan.
Pricing. DSCR pricing is set file by file. Lenders that publish what drives it name the credit score, the down payment and the ratio, and at least one also names the prepayment term. A stronger file on those first three usually prices better.
We also cover DSCR loans in Texas and DSCR loans in California, if your portfolio has plans beyond the Sunshine State.
What this means for you: a rule you read on one site is one lender's rule. The file that misses one lender's line can fit another's.
Feed the pelican first: what Florida changes in the numbers
Property taxes. Florida's best-known caps belong to a homestead. Save Our Homes limits a homestead's yearly assessment increase to 3% or the change in inflation, whichever is lower, and that cap resets when the home sells. A rental gets its own, looser cap: for a residential property of nine or fewer units that isn't a homestead, the assessed value can rise no more than 10% a year. That cap doesn't apply to school district taxes. After a sale, the property is reassessed at its full market value, which Florida calls just value, on the following January 1, and the 10% cap runs from that new value. So build the rental's tax line on that value, not on the seller's bill.
Insurance. In Florida, insurance can be the biggest swing in the monthly cost. It's the pelican's biggest gulp. If your policy is with Citizens Property Insurance and covers wind, Citizens requires flood insurance on its personal residential policies in FEMA's special flood hazard areas, and it has been phasing that rule in elsewhere. Price wind and flood before you count on the ratio.
Condos. Florida law requires a milestone structural inspection for condominium buildings three habitable stories or taller, due by the end of the year the building turns 30 and every 10 years after. At least one lender asks that a Florida condo project meet these state requirements, including the structural integrity reserve study, before it will lend. Ask for the association's inspection and reserve status early. (Florida condo boards have homework now, and the due dates are real.)
Vacation rentals. Florida licenses vacation rentals, and its definition covers single-family through four-family houses and condo units rented to short-term guests. The state charges a 6% transient rental tax on short stays. State law also says a local rule can't ban vacation rentals or limit how long or how often you rent, though local rules adopted on or before June 1, 2011, still stand.
What this means for you: in Florida, insurance, the tax line and the condo association decide a lot of DSCR files. Weigh those three first, and the ratio you see is one you can plan on.
Where it shines, where it stings: Florida DSCR loan pros and cons
Pros
- Qualifying rests on the rent, so no tax returns, W-2s or job check.
- Vacation rentals and condos can work with several lenders.
- A rental's yearly assessment increase is capped at 10% for non-school taxes.
- Title can usually sit in an LLC.
- Because lenders set their own rules, a file has more than one place to land.
Cons
- It takes more down than a home you'll live in, and there's no published zero-down purchase.
- Pricing can run higher than a conventional investment loan.
- Many DSCR loans charge a fee for paying off early.
- Wind and flood insurance can pull the ratio down on the coast.
- Florida's closing taxes add to your cash to close.
Nobody should find out what a rental really costs after they own it. The rent will keep showing off; that's its job. Weigh the pelican before you buy, and the ratio stops being a hope and starts being a plan.
Questions people ask
How much is the down payment on a DSCR loan in Florida?
On a purchase, lenders publish 20% down most often, and some publish 15% for files with higher credit scores. Some ask 25% down on a condo or a two-to-four-unit. Florida also adds a documentary stamp tax and an intangible tax on the mortgage at closing, so plan for those in your cash to close.
Can I get a Florida DSCR loan with no money down?
We didn't find one. None of the lenders we read publishes a regular DSCR purchase programme with no money down, and the lowest published down payment we found was 15%. On a cash-out refinance there's no down payment, because the equity already in the property does that job.
What is a DSCR loan in Florida?
It's a business-purpose mortgage on a rental that qualifies on the property's rent instead of your income. Lenders divide the monthly rent by the monthly cost: principal, interest, property taxes, insurance and any HOA or condo dues. In Florida, insurance and property taxes often decide how that ratio comes out, so price those first.
What are the DSCR loan requirements in Florida?
Each lender sets its own, because a DSCR loan on a one-to-four-unit rental sits outside Fannie Mae, Freddie Mac and the government programmes. Lenders commonly publish 20% down, credit-score floors from 620 to 680, and minimum loans mostly from $100,000 to $150,000. Minimum ratios run from 1.00 or higher down to 0.75, and at least one lender publishes none.
What are DSCR loan rates in Florida?
DSCR pricing is set file by file, so there isn't one Florida rate to quote. Lenders that publish what moves it name the credit score, the down payment and the ratio, and at least one also names the prepayment term. A higher score, more down or a stronger ratio usually prices better, and we can compare lenders on your file together.
Can I use a DSCR loan on a Florida condo?
Often, yes. Several lenders publish condos as eligible, including non-warrantable ones, though some ask 25% down. Florida requires milestone structural inspections for condo buildings three habitable stories or taller, and at least one lender asks that a Florida condo project meet those state rules before it lends. Ask the association for its inspection and reserve status early.
Can I use a DSCR loan for a Florida vacation rental?
Often, yes. Several lenders publish short-term rentals as eligible. Florida licenses vacation rentals and charges a 6% state transient rental tax on short stays. State law says a local rule can't ban vacation rentals or limit how long or how often you rent, though rules adopted on or before June 1, 2011, still stand.
Are property taxes lower on a Florida rental?
A rental doesn't get the homestead exemption or the Save Our Homes cap, which belong to the owner's own home. It gets its own cap: for a non-homestead residential property of nine or fewer units, the assessed value can rise no more than 10% a year, except for school taxes. After a sale, it's reassessed at full market value the following January 1, and the cap runs from there.
