Capital Kings LLCDSCR Loans in Texas.Qualify on the rent, not your W-2.
A 30-year fixed rental loan that’s underwritten on what the property earns. No tax returns, no W-2s, no debt-to-income ratio. If the rent covers the payment and your credit is 660 or higher, the deal can qualify, on loans from $100,000. We’re a broker, not a lender, so we shop your file across 400+ lenders and price it on a term sheet you can actually read.
Prefer to talk it through? Call or text Micah at (281) 636-5682.
How does a DSCR loan qualify?
1.00 means the rent exactly covers the payment. 1.20 and up reads as strong, and some lenders price it better; the instant term sheet doesn’t adjust the rate for it. Under 1.00, the loan size steps down until the rent carries it.
What counts as rent
A signed lease, or the market rent from the appraiser’s rent schedule if the property is vacant or you’re buying it. Gross rent, before expenses. Short-term rental income is handled lender by lender.
What isn’t checked
Your tax returns, W-2s, pay stubs, and debt-to-income ratio. The property carries the loan. Your credit still sets the leverage cap and the rate tier, and reserves have to be in the bank.
A Houston rental, priced the way the application prices it
A $250,000 single-family rental in Houston renting for $2,400 a month, 740-759 credit, bought at the 80% leverage cap. Taxes estimated at 2% of value and insurance at 0.5%, the same defaults the term sheet uses when you haven’t typed the real numbers yet.
Principal and interest $1,382, taxes $417, insurance $104 a month. Down payment $50,000 plus the lender’s underwriting, legal and setup fees ($2,295, no origination fee), and about 3 months of payments in reserves. Priced the way the instant term sheet prices it, as of October 2026; we re-price every file against the full network before you sign.
Leverage, rate tiers and what moves them
| Leverage cap by credit | Purchase or rate-and-term | Cash-out |
|---|---|---|
| 720 and up credit | 80% LTV | 80% LTV |
| 700 to 719 credit | 80% LTV | 75% LTV |
| 680 to 699 credit | 75% LTV | 70% LTV |
| 660 to 679 credit | 65% LTV | 60% LTV |
| Rate, 30-year fixed (760+ credit, single family, purchase, 5-year prepay) | Rate |
|---|---|
| Up to 70% LTV | 7% |
| 70% to 75% LTV | 7.13% |
| 75% to 80% LTV | 7.25% |
| 740-759 credit | add 0.08% to 0.13% by LTV |
| 720-739 credit | add 0.13% to 0.36% by LTV |
| 660-719 credit | add 0.13% to 0.73% by band and LTV |
| Rate-and-term refinance | add 0.19% |
| Cash-out refinance | add 0.37%, 0.77% above 75% LTV |
| 2-4 units | add 0.26% |
| Origination | None, priced at par |
| Lender fees | About $2,295 (underwriting, legal, setup) |
| Reserves | 3 months purchase, 6 months refinance |
| Minimum loan | $100,000 |
| Prepayment penalty | Usually 3 to 5 years, see below |
These are the numbers the instant term sheet uses, as of October 2026. The strongest files can price lower through specific lenders in the network, and we shop every DSCR file against the whole network before it’s signed. Your term sheet shows the exact figure.
The prepayment penalty
Most DSCR loans carry a prepayment penalty: a fee for paying the loan off early, by selling or refinancing, before a set number of years runs out. It’s charged as a percent of the balance you pay off, and on a step-down schedule it shrinks each year until it’s gone. You pick the schedule when the loan is priced, and it moves the rate. A longer penalty buys a lower rate. A shorter one, or none at all, costs a higher rate.
| Schedule | What paying off early costs |
|---|---|
| 5-4-3-2-1 | 5% of the balance in year one, 4% in year two, down to 1% in year five, then nothing. A common base schedule on the DSCR rate sheets we price. |
| 5-5-5-5-5 | A flat 5% any time in the first five years. It usually prices a little lower than 5-4-3-2-1, and it’s the most expensive to get out of early. |
| 4-3-2-1 | Four years, stepping down from 4% to 1%. Not every lender offers it. |
| 3-2-1 | 3% in year one, 2% in year two, 1% in year three, then nothing. A higher rate than a five-year schedule. |
| 1 year | A single-year penalty, usually 1% or 3%. A higher rate again. |
| No penalty | Sell or refinance any time with nothing owed. The highest rate of the options, where a lender offers it at all. |
On the $200,000 example, a 5-4-3-2-1 schedule means selling or refinancing in the first year costs up to about $10,000, and waiting until year six costs nothing. Buying down the rate is a separate lever: it lowers the rate and doesn’t remove the penalty. Texas isn’t one of the states that restrict these penalties, so expect one on most Texas DSCR loans. Tell us up front if you might sell or refinance within a few years, and we’ll price a shorter schedule or no penalty so the exit math still works. The exact schedule is written into the lender’s loan terms, and we confirm it with you before you sign.
Price your rental right now
Prefilled with the example above. Change any number and it reprices instantly on the same numbers the application uses.
Sizing your rental on the same terms as the application. Get the real term sheet →
Can I get a DSCR loan on my first rental?
Most people buying a first rental assume they need a landlord track record, two years of tax returns and a lender willing to take a chance on them. A DSCR loan needs none of that. Nobody asks what you make. The property has to carry its own payment, you need the down payment and a few months of reserves in the bank, and your credit sets how much you can borrow. That’s the whole test, and a first rental is priced the same as a tenth one.
700 and up gets you 80% loan-to-value, which is 20% down. 680 to 699 caps at 75%, and 660 to 679 at 65%.
Down payment, closing costs, and about 3 months of the full payment left in your account as reserves. The real number is itemized below.
A rent-ready 1-4 unit rental, a loan of $100,000 or more, and rent at or above the full monthly payment. A signed lease or the appraiser’s market rent sets it.
There’s no experience adjustment on a DSCR loan. The instant term sheet prices your first rental exactly the way it prices a ten-property landlord’s.
The real term sheet for the example above
This is the term sheet the application generates for the same $250,000 Houston rental at $2,400 rent and 740-759 credit. Every fee is on it, and every line says who gets paid: your equity, the lender, the title company, the insurer, the appraiser, or the broker.
- Down paymentEquity$50,000
- Appraisal feeAppraiser$550
- Prepaid interestLender$607
- Lender fees, underwriting and legalLender$2,295
- Broker feeBroker$2,000
- Closing / titleTitle co$3,571
- Property insuranceInsurer$1,250
- Escrow setup, 3 months of taxesLender$1,250
The gold broker line is the only money Capital Kings earns. Proof of funds adds $5,709 of reserves, 3 months of the $1,903 payment, that stay in your account. $2,400 rent against that payment leaves $497 a month, before vacancy and repairs.
This is a sample sheet for a made-up borrower, built by the same engine that builds yours. Yours takes about five minutes and doesn’t pull your credit.
Four mistakes first-time investors make
- Underwriting on the seller’s tax bill. Texas appraisal districts value at market every year and an investor gets no homestead cap or exemption, so the seller’s bill is usually lower than yours will be. Run the ratio on the full appraised value at the county rate.
- Counting Airbnb income as rent. Short-term rental income is handled lender by lender. The instant term sheet uses the lease or the appraiser’s market rent, so underwrite on that first.
- Buying a project with a DSCR loan. The property has to be rent-ready. If it needs work, that’s a hard money bridge first and a DSCR refinance once it’s rented, which is the BRRRR play.
- Spending the reserves. Reserves are verified from your bank statements and have to still be there after the down payment and closing costs clear. Budget them from day one.
What documents does the lender need?
- Signed lease, or the appraiser sets market rent (form 1007) if vacant.
- Purchase contract, or the current mortgage statement on a refinance.
- LLC certificate of formation, EIN letter and operating agreement.
- Government ID for every member of the entity.
- Two months of bank statements showing reserves.
- Landlord insurance quote or binder. Tax bill if you have it.
Not on the list: tax returns, W-2s, pay stubs, or an employment verification.
Which loan do you actually need?
Where does DSCR pencil in Texas?
DSCR is a statewide product. Where it prices best is where rents keep pace with Texas property taxes: the working-class suburbs of Houston and Dallas-Fort Worth, San Antonio’s north and west sides, and the Austin metro outside the core. A 2% tax bill sits inside the payment your rent has to cover, so a rental that clears 1.30 in a low-tax state can land near 1.05 here. We underwrite with the real tax bill from day one.
How long does it take to close?
Send the property in about five minutes with no credit pull, we shop it to the DSCR lenders that fit, and the appraiser sets the value and market rent while your entity documents, insurance binder and reserves clear. Closing takes 21-30 days typical, on a 30-year fixed held in your LLC.
Texas DSCR loan FAQ
What is a DSCR loan?
What DSCR do I need to qualify in Texas?
What credit score do I need for a DSCR loan?
How much do I have to put down on a DSCR loan?
Can a first-time investor get a DSCR loan?
Do I need a lease in place, or can I use market rent?
Why do Texas property taxes matter so much on a DSCR loan?
Can I refinance a flip into a DSCR loan?
Do DSCR loans in Texas have a prepayment penalty?
How fast does a DSCR loan close?
Which Texas cities have their own page?
Which questions have worked examples?
Before you refinance or buy
Ready to price your Texas rental?
About five minutes to an instant DSCR term sheet. No credit pull, no tax returns, every fee on the page.