Who this loan is for
Investors buying a resale single-family home, townhome, condo or 2–4 unit property anywhere in the Metroplex to hold as a long-term rental. You can be buying your first rental or adding to a portfolio. You will not live in the property, and neither will anyone in your family.
If the home is a builder’s new construction, see new-build rental loans, because the tax estimate, incentives and completion rules differ. If the house needs a heavy renovation before it can be rented, a bridge loan followed by a DSCR refinance may fit better; see DSCR vs hard money.
Use the option period for the numbers that move DSCR
Most Texas resale contracts give the buyer an option period, a short window to inspect and walk away. For a DSCR purchase, that window is when you confirm the inputs that change your ratio:
- Taxing units. Pull the appraisal district record and the latest tax statement for the parcel. List every unit: city, county, school district, any MUD or other special district. Read the seller’s MUD and PID notices.
- The homestead question. If the seller lived in the home, the current bill may reflect a homestead exemption you will not get as an investor. Estimate taxes without it.
- HOA leasing rules. Get the declaration and any leasing policy. Some DFW associations cap rentals, require minimum lease terms or ban short-term stays.
- Foundation and roof. Order an inspection that comments on both. Ask the seller for any foundation repair warranty and the roof’s age and claim history.
- Rent support. Pull comparable rentals for the same school district and age of home.
Contract terms vary. Ask your agent or a Texas real estate attorney about your option period and termination rights.
How the rent is sized on a purchase
If the home is already leased, the lender will usually look at the existing lease and the appraiser’s market rent. Check that the lease transfers to you and when it ends. If the home is vacant, many programs use the appraiser’s market rent on a single-family rent schedule. That is why your own comparable-rent check matters: if your estimate is above what the appraiser finds, the ratio drops.
A worked example with user-style inputs: a Denton County three-bedroom with market rent of $2,150 and a full payment of $1,960 has a DSCR of 2,150 / 1,960 = 1.10. If the appraiser supports only $2,000, the same loan gives 2,000 / 1,960 = 1.02. Run both in the calculator before you commit.
Down payment, reserves and closing
Down payment, reserve and credit requirements vary by program and by property type, and we do not promise a specific leverage figure. Plan for a meaningful down payment, closing costs and several months of reserves. Texas purchases close through a title company, which also handles the title policy and any survey requirements.
If you are buying in an LLC, have the entity documents ready: articles of organization, operating agreement and the EIN letter. Many programs require a personal guarantee.
Next step
Send the address, contract price, expected rent and option-period dates on the DFW scenario form. We will list what we need and compare wholesale programs. City-specific notes are in the DFW city guides.