What's the minimum DSCR ratio most Florida lenders require?

Most Florida lenders require a minimum DSCR of 0.75 to 0.85, according to Visio Lending, Capital Direct Lending, and Broadmark Realty Capital. A DSCR of 0.75 means your property's net operating income covers 75% of your annual debt service (loan payments). Some lenders will accept ratios as low as 0.70, but this typically results in higher interest rates and stricter terms.

Can I get a DSCR loan if I'm a brand-new STR investor with no rental history?

Yes, many lenders will approve DSCR loans for new STR investors by using projected income based on comparable properties in your market and current Airbnb/VRBO rates. According to Visio Lending and Capital Direct Lending, you'll need a professional market analysis showing similar properties' nightly rates and occupancy expectations. Having 3–6 months of your own rental data (if you already own the property) strengthens your application.

How much will I pay in interest on a DSCR loan?

According to current market data from Capital Direct Lending and Visio Lending, DSCR loan rates range from 8.5% to 11% (as of Q4 2024), typically 1.5–2.5 percentage points higher than conventional mortgage rates. Your exact rate depends on your DSCR ratio, down payment, credit score, loan term, and lender. Lower DSCR ratios (closer to 0.75) usually qualify for higher rates than ratios above 1.0.

What happens if my STR property's occupancy drops below what I projected?

If occupancy falls short, your net operating income decreases, which can lower your DSCR ratio. However, the loan is already closed—the lender isn't going to call it due. You'll be responsible for making your monthly payments regardless of income. This is why conservative occupancy projections (60–65% for new properties) and maintaining 6–12 months of reserve funds are critical for STR investors using DSCR financing.

Can I use a DSCR loan to buy multiple STR properties at once?

Yes, DSCR loans are popular with portfolio STR investors. Many lenders, including Visio Lending and Caliber Home Loans, allow you to refinance or acquire multiple properties. However, each property is evaluated separately for its DSCR ratio. If you're buying a second or third property, you'll need each property's income to support its individual debt service, or you may be able to combine NOI from multiple properties if the lender allows.

DSCR Loans for Florida STR Investment Properties: Complete Guide

What Is a DSCR Loan and How Does It Help STR Investors?

A Debt Service Coverage Ratio (DSCR) loan is a financing option that qualifies you based on your property's income rather than your personal income—making it ideal for short-term rental investors who don't have two years of tax returns or who want to expand their portfolio without proving W-2 employment. In simple terms, a DSCR loan asks: "Will this rental property generate enough income to pay back the loan?" instead of "How much do you personally earn?" For Florida STR investors, this is a game-changer, especially in competitive markets like Tampa Bay where traditional mortgage lenders have largely stepped away from STR financing.

How Does the DSCR Calculation Actually Work?

The DSCR formula is straightforward but crucial to understand before you approach a lender:

DSCR = Net Operating Income (NOI) ÷ Annual Debt Service

Here's what that means in plain terms:

Net Operating Income (NOI) = Your rental income minus realistic operating expenses (property taxes, insurance, maintenance, cleaning, property management fees, utilities)
Annual Debt Service = The total principal and interest you'll pay on the loan each year

According to Visio Lending and Capital Direct Lending, most lenders require a minimum DSCR of 0.75 to 1.25, meaning your property's income should cover at least 75% to 125% of your annual loan payments. A DSCR of 1.0 means your property breaks even on debt payments; anything above 1.0 is profit.

Let's walk through a real example: Suppose you're buying a $350,000 Tampa Bay property with a $70,000 down payment (20%). Your loan is $280,000 at 9.5% over 30 years, meaning your annual debt service is roughly $27,648.

If your property generates $42,660 in gross annual rental income at $180/night with 65% occupancy, and your operating expenses total $20,458 annually, your NOI is $22,202. That gives you a DSCR of 0.80 ($22,202 ÷ $27,648), which meets most lender minimums.

What Are the Key Requirements for a DSCR Loan?

DSCR loans have different qualification rules than traditional mortgages. According to Broadmark Realty Capital and NewRez/Caliber Home Loans, here's what you'll typically need:

Down Payment: 20–30% (higher than conventional loans, but you can find 15% options from specialized lenders)
DSCR Ratio: Minimum 0.75–0.80 for most Florida lenders; some allow as low as 0.70 with higher rates
Credit Score: 680+ (much more lenient than traditional mortgages; some lenders go to 620)
Interest Rates: According to current market data from Visio Lending and Capital Direct Lending, DSCR rates range from 8.5% to 11% (Q4 2024), typically 1.5–2.5 points higher than conventional rates
Loan-to-Value (LTV): Most Florida lenders cap at 75–80% LTV, meaning you're borrowing a maximum of 75–80% of the property value
Loan Term: 5–30 years; most lenders offer 30-year amortization
Documentation: Minimal personal income verification; instead, lenders want 12+ months of rental data (Airbnb, VRBO, or property management statements)

Unlike conventional loans, DSCR lenders focus almost entirely on property performance, not your personal credit or employment history.

What Documentation Do Lenders Want for STR Income?

Lenders evaluating your STR property will ask for proof of income and realistic expense projections. Here's the typical checklist:

12+ months of rental statements from Airbnb, VRBO, Booking.com, or your property manager showing nightly rates, occupancy, and gross income
Operating expense documentation: recent property tax assessments, homeowners insurance quotes (STR-specific policies are 15–25% higher than standard), maintenance invoices, and property management agreements
Appraisal: Standard home appraisal, though some lenders will use lower-cost valuations for non-owner-occupied properties
Personal credit report and authorization (minimal scrutiny compared to traditional loans)
Comparable market analysis showing similar STR properties in your neighborhood and their nightly rates

For new STR investors without a 12-month history, some lenders—such as Visio Lending and Capital Direct Lending—will accept projected income based on comparable properties in your market and current Airbnb rates. This is why having a professional market analysis for your neighborhood is critical.

Which Lenders Offer DSCR Loans in Florida?

Not all lenders are created equal when it comes to STR financing. According to Broadmark Realty Capital, Capital Direct Lending, and Visio Lending, here are the most competitive options for Tampa Bay investors:

Visio Lending: 0.75 minimum DSCR, up to 80% LTV, rates 8.5–10.5%, specializes in STR and multifamily
Capital Direct Lending: 0.80 minimum DSCR, 75% LTV, rates 8.75–11%, STR-focused with fast closings
Broadmark Realty Capital: 0.75 minimum DSCR, 80% LTV, competitive rates, established DSCR specialist
Caliber Home Loans (NewRez): 0.85 minimum DSCR, 75% LTV, portfolio lender with institutional backing
First National Bank of Florida: 0.90 minimum DSCR, 75% LTV, regional lender with local presence

Also check with local Florida credit unions and community banks—many now offer DSCR products and may give preference to local borrowers. When comparing lenders, always ask about prepayment penalties, rate locks, closing costs, and borrower reserve requirements (typically 6–12 months of principal, interest, taxes, and insurance).

What's the Timeline and Cost for a DSCR Loan?

DSCR loans typically close in 7–14 days from formal application to funding, significantly faster than conventional mortgages. According to Capital Direct Lending and Visio Lending, here's what to expect:

Days 1–2: Application submission with property details and rental income documentation
Days 3–5: Property evaluation and preliminary underwriting
Days 6–10: Full underwriting and DSCR calculation verification
Days 11–14: Final approval and funding

Closing costs for DSCR loans typically run 2–4% of the loan amount (comparable to conventional mortgages). This covers appraisal ($400–$600), title insurance and search ($800–$1,200), underwriting fees ($500–$1,000), and origination fees (0.5–1.5% of loan amount). Some lenders offer "no-closing-cost" programs where rates are slightly higher instead.

Should You Use a DSCR Loan for Your Tampa Bay STR?

DSCR loans make sense if you:

Are a new STR investor without 2 years of tax returns
Have a property with strong rental income potential (65%+ occupancy feasible)
Want to expand your STR portfolio without personal income qualification
Prefer faster closing timelines
Are willing to put 20–30% down and accept higher interest rates

They may not make sense if you have conventional mortgage options available or if your property's NOI won't support a 0.75+ DSCR ratio. Before committing, use our STR investment calculators to model your property's realistic income and expenses across different occupancy scenarios.

Ready to explore STR investment financing options? Learn how to evaluate and purchase a short-term rental property in Florida with the right financing strategy for your goals.

Disclaimer: Lending requirements, DSCR minimums, and interest rates change frequently. Confirm current lending standards with your chosen lender and consult a real estate attorney before purchasing an STR property. This guide is educational and not legal or financial advice.