Florida DSCR Loans for STR Financing

Frequently Asked Questions

What is a DSCR loan and how does it work for Florida real estate investors?

A DSCR loan (Debt Service Coverage Ratio loan) is a financing option that allows Florida real estate investors to qualify based on the income a property generates—not personal income or W-2s. Lenders evaluate whether the rental income is enough to cover the loan’s monthly payments, including taxes and insurance. This type of loan is especially helpful in high-demand markets like Miami, Orlando, and Tampa, where STR income can easily meet or exceed debt obligations. DSCR loans remove the need for tax returns or credit score minimums, offering a flexible, asset-focused alternative to conventional loans for scaling short-term or long-term rental portfolios across Florida.

How is DSCR calculated in a typical loan scenario for Florida investors?

In Florida, DSCR is calculated by dividing a property's net operating income (NOI) by its annual debt obligations, including principal, interest, taxes, and insurance. For example, if a Florida rental property generates $60,000 in NOI and the total debt service is $50,000, the DSCR would be 1.20. This means the income exceeds the debt, making the property more favorable to lenders. A DSCR of 1.00 is typically the minimum required, but Florida lenders may look for higher ratios depending on the property's location and type. Understanding how DSCR works in Florida helps investors compare properties and determine loan eligibility. Whether you're investing in STRs or long-term rentals, a strong DSCR improves your chances of approval and may lead to better terms on Florida real estate deals.

What is considered a good DSCR ratio when applying for financing?

In Florida, a good DSCR ratio typically starts at 1.20 or higher. While most Florida lenders accept the minimum threshold of 1.00, stronger DSCR ratios improve approval odds and unlock better loan terms. A 1.25 DSCR in Florida may result in lower interest rates, reduced reserve requirements, or less restrictive underwriting. The higher the DSCR, the more confident a lender feels in the property’s ability to cover its debt. For Florida investors purchasing STRs or long-term rentals, targeting a higher DSCR offers a competitive edge. Whether you're buying in Orlando, Miami, or Tampa, knowing what counts as a good DSCR in Florida ensures your deal is financially sound and lender-ready.

Can I qualify for a DSCR loan if my personal income is limited?

Yes, you can qualify for a DSCR loan even if your personal income is limited. DSCR loans, often referred to as Airbnb loans when used for short-term rental properties, are designed to approve borrowers based on the income the property generates—not personal W-2s, tax returns, or debt-to-income ratios. Lenders calculate the property's debt service coverage ratio to determine if the income is sufficient to support the loan. As long as the DSCR meets the required threshold—usually 1.00 or higher—you can often be approved regardless of personal income. This makes Airbnb loans ideal for self-employed investors, business owners, or anyone scaling a rental portfolio without relying on traditional underwriting standards.

How does a lender evaluate rental income when approving a DSCR loan?

In Florida, lenders evaluating rental income for DSCR loans focus on how much income the property itself generates. Instead of looking at your personal finances, Florida lenders review lease agreements, market rent analyses, or short-term rental histories to verify income potential. The property’s net operating income is then compared to the projected loan payments to determine the DSCR. If the ratio meets or exceeds the required threshold—usually 1.00 or higher—Florida investors can qualify, even without W-2 income. Lenders in Florida want assurance that the property can support itself. This asset-based approach allows real estate investors in Florida to expand their portfolios without relying on traditional income documentation.

What’s the minimum debt service coverage ratio required for approval?

In Florida, the minimum DSCR required to qualify for a DSCR loan is generally 1.00. This means the property’s rental income must fully cover its debt obligations. However, some Florida lenders may approve ratios as low as 0.75, particularly if the investor has strong reserves, equity, or experience. Still, a DSCR of 1.20 or higher is preferred in many Florida markets to secure favorable terms. Lenders in Florida assess risk based on location, property type, and income consistency, especially in areas like Miami, Tampa, or Orlando. DSCR loans in Florida offer flexibility, but understanding the minimum ratio required—and how it affects loan conditions—is critical. Florida investors who exceed the 1.00 threshold are more likely to receive better rates, lower reserve requirements, and a smoother underwriting process overall.

Who should consider using a DSCR instead of a traditional loan?

These loans are ideal for self-employed borrowers, LLCs, and those with multiple properties who prefer fewer documentation requirements. In Florida’s active short-term rental markets like Miami and Orlando, DSCR loans provide a flexible path to grow portfolios. Rather than relying on W-2s or tax returns, Florida investors can leverage rental cash flow to access capital quickly. This type of loan is especially helpful when scaling into additional properties where conventional underwriting would slow you down.

Expanding your rental portfolio beyond Florida? We also offer financing in Georgia and Alabama , making it easy to scale across the Southeast with the same asset-based approval process.