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DSCR loans for Miami and South Florida rental property
Long-term financing approved on what the property earns. Single-family rentals, duplexes to fourplexes, townhomes and condos, with no tax returns or employment check.
DSCR loan terms
| To buy | up to 85% LTV |
| Cash-out refinance | up to 80% LTV |
| Credit scores from | 600 |
| Fixed terms | 5 to 30 years |
| Prepayment choices | 3-year, 5-year or none |
| Typical closing | about 30 days |
At a 600 score the limit is 70% loan-to-value. Stronger credit qualifies for up to 85% on a purchase.
DSCR in plain terms
DSCR is short for debt service coverage ratio. It answers one question: does the rent pay the mortgage? If it does, the loan can be approved without looking at your personal income.
DSCR = monthly rent ÷ monthly payment. The payment counts principal, interest, property taxes, insurance and any homeowners association fee.
| Rent | Payment | DSCR | Reading |
|---|---|---|---|
| $2,860 | $2,200 | 1.30 | Income is 30% above the payment |
| $2,200 | $2,200 | 1.00 | Income equals the payment |
| $1,980 | $2,200 | 0.90 | Income is short; expect less leverage or a higher rate |
We prefer a ratio of 1.0 or higher. A strong borrower can qualify under 1.0 with lower leverage, and there is a no-DSCR option up to 75% loan-to-value at a higher rate.
Why taxes, insurance and association fees matter so much in South Florida
- Property tax. Florida has no state income tax, and investment property gets no homestead exemption, so property tax is a large cost of holding a rental. Combined rates in Miami-Dade and Broward are often close to 2% of taxable value. On non-homestead property, the taxable value for most levies can rise no more than 10% a year, but the cap resets when the property is sold, so a buyer is taxed on full market value the next year. Voters approved Amendment 3 on November 3, 2026, which lowers that cap to 5% starting in 2027; school taxes are not capped.
- Insurance. Windstorm and flood coverage drive insurance costs across South Florida. Many insurers ask for a four-point inspection on older homes and give credits for a wind mitigation report, and Citizens Property Insurance is the state’s insurer of last resort. Large parts of the region are in FEMA flood zones, and flood insurance is a separate policy. Get quotes before you make an offer.
- Condo and HOA fees. Condo dues and special assessments count in the payment. Florida now requires a milestone structural inspection of condo buildings of three or more stories once they reach 30 years, then every 10 years, and a structural integrity reserve study every 10 years with reserves that can no longer be waived. Many older buildings face large special assessments as a result. Read the association’s budget, reserve study and any planned assessments before you buy a unit.
Use the tax bill at full market value, not the seller’s capped or homestead figure, and get real windstorm and flood quotes before you make an offer. Those numbers decide whether many South Florida rentals clear 1.0.
Which rent counts
- Long-term rentals. Year-long leases are the core of the market, with strong demand from a growing population. We use the lease or the market rent from the appraisal.
- Duplexes to fourplexes. Every unit’s rent counts.
- Short-term rentals. Short-term rental rules differ city by city across South Florida. Florida law bars cities from banning vacation rentals outright, but rules adopted before June 2011 still stand, and Miami Beach bans short-term rentals in single-family homes and most residential districts, and fines for illegal rentals are steep. In the City of Miami, short stays are allowed only where the zoning permits them, with a certificate of use and a business tax receipt, and every operator also needs a Florida vacation rental license and must collect state and county tourist taxes. Many condo associations ban short stays as well. Because the rules depend on the exact address and building, we underwrite on long-term rent unless the property can legally host short stays.
- Rental rules. Florida law bars cities and counties from adopting rent control and from setting their own landlord-tenant rules, so rents follow the market and the state’s landlord-tenant law applies everywhere. Some cities require a business tax receipt or a rental registration for each rental property, so check with the city where the property sits.
Loan options
- Fixed terms from 5 to 30 years. The 10/1 interest-only and the 30-year fully amortized loan are chosen most often.
- Qualifying on the interest-only payment is available.
- A 3-year or 5-year prepayment penalty. The 5-year option usually prices about 0.25 to 0.5% lower. No penalty is available at a higher rate.
- One property or a whole portfolio.
Refinancing after a renovation or a build
If you renovate or build a property and decide to keep it, a DSCR loan replaces the short-term fix and flip or construction loan with long-term debt. A cash-out refinance at up to 80% loan-to-value can hand back much of the cash you put in.
Documents we ask for
- Loan application
- Signed purchase contract, or your original settlement statement for a refinance
- The lease, or market rent from the appraisal
- Two months of bank statements
- Insurance and title contacts, and someone to let the appraiser in
- For a condo or a property in an association: the dues, the budget and any special assessments
- For an LLC: articles of organization, EIN letter and operating agreement
The full list is in our hard money loan document checklist.
DSCR loans: common questions
We prefer 1.0 or higher, which means the rent covers the full payment. Strong borrowers can qualify below 1.0 with lower leverage, and a no-DSCR program is available up to 75% loan-to-value at a higher rate.
Usually we underwrite on long-term rent, because short-term rentals are banned in much of Miami Beach, limited by zoning in the City of Miami and barred by many condo associations. Ask us about a specific address.
Most often it is property tax, insurance or condo dues. A new owner is taxed on full market value without a homestead exemption, and windstorm and flood coverage is expensive in South Florida.
Yes, including non-warrantable condos. We review the association’s budget, reserves, milestone inspection status and any special assessments, since those affect the payment and the value.
The minimum is 600, at up to 70% loan-to-value. Higher scores qualify for up to 85% of the purchase price.
No. A DSCR loan is approved on the property’s rental income. There is no employment, tax return or debt-to-income review.
No. These are business-purpose loans and are not reported on your personal credit like a conventional mortgage. There is no cap on how many properties we will finance for you.
Buying or refinancing a South Florida rental?
Send the address, the price and what you plan to do with the property. We will reply with the leverage and pricing that fit your deal.