DSCR Loan Florida: All You Need to Know

Florida is among the most visited states in the US. And one of the main reasons for the visits is the excellent climate and Disney Park. These statistics show that there is potential growth in real estate in Florida. Therefore, if you want to invest in commercial real estate, you may have to consider taking a DSCR loan in Florida.

If you invest along the beaches or in the most populated regions of Florida, your property business will thrive. As a result, you will not struggle to repay the DSCR loan. That’s why you should research first before investing using a DSCR loan.

This blog will show you everything you need to know about the DSCR loan Florida. Keep reading to get the best insights before investing. Remember, our goal is to help you make the right money decisions to gain financial freedom in the end.

DSCR loan Florida

What are DSCR loans?

Debt service coverage ratio(DSCR) is the ratio that determines an individual or organizational ability to repay debt with the cash flow of their investments. DSCR lenders use the available history of the investment to measure the amount of loan to give you.

DSCR loans are Non-QM (Qualified Mortgage) which can help property investors who cannot qualify for mortgages, especially due to bad credit scores. As much as you can build your credit score and qualify for a mortgage, you can always rely on DSCR loans for faster approval.

For instance, if you are investing in real estate, the lender will assess the location to know the level of rental income. DSCR loans in Florida are a good choice for unemployed people with property investments in Florida.

Here is how to know the debt service coverage ratio for your property investment in Florida:

DSCR=Net Operating  Income (NOI)/Debt Service(Mortgage Repayment)

You get the Net Operating income using the formula of 

NOI = Income – Expenses 

A good DSCR should be 1:00, meaning the borrower can repay the loan comfortably. With a DSCR of 1:5 and above, you will have enough to repay the loan and still manage to save money.

DSCR loans are convenient for people with existing properties that can repay a loan instead of providing proof of income from employers.

How DSCR Loan Florida Works

What matters when applying for a DSCR loan in Florida is the cash flow of your investment property. And the gyou’lling is that you’ll have good yields if you have invested in the most populated regions of Florida state. 

DSCR loans are better than personal loans because your persdoesn’tedit score doesn’t matter. All that lenders check is the current and previous cash flow of your property investment.

Lenders would also want to know how you intend to use the property you purchase with a DSCR loan in Florida. In most cases, you stand a chance to get the loan if you want to use the property for rental income. That will be easier to calculate the DSCR.

If you are a real estdon’tnvestor, you don’t have to go through the tedious process of conventional mortgages. Remember, these mortgages require you to provide income statements, bank statements, and proof of employment, among other requirements. 

Instead, you can go for a DSCR loan in Florida to finance your investment.

How Lenders Assess the Property For a DSCR Loan

You might be concerned about the vetting process of a DSCR loan Florida. Well, not all people who apply for these loans get approved. If the lender rejects your loan application, you can ask them the reasons behind their decision.

The first thing that DSCR loan lenders want to ensure is that you are not buying your residential property. The property you buy with this loan should generate income, preferably monthly income.

Lenders also assess the potential income the property can generate annually. The main determinant of your income in property is the location and the overall condition of the pretty. Therefore, your property should be in a growing area where there is promising population growth which translates to more tenants.

Furthermore, the property should look attractive to potential tenants who will help you generate the income you need from the property.

If DSCR loan lenders in Florida see the potential in your property for income generation, they will give you the loan. 

Remember that the property will be the security against the loan, so if you skip payments, the lender will repossess it.

DSCR Loan FloridaIt’suirements

It’s not tough to qualify for a DSCR loan in Florida, as long as you have the requirements. The main requirement to get a DSCR loan is a property generating monthly income. 

Income source

While some lenders will fund you for a property you would like to buy, others require you to have an active income property. This is a good move because you may not get tenants for your income property as soon as you buy it.


Your cash flow must be greater than your loan installment repayments. This means you should have a DSCR of 1:3 and above. Ayou’llsult, you’ll be able to service the DSCR loan Florida without struggles. If your DSCR is lower than 1:3, you may have to take some measures before applying for a DSCR loan Florida.

Credit score

DSCR loan lenders check your credit score before approving your loan application. Therefore, whether you are using a personal or business credit score, it should be excellent. If you have a bad credit score, you can use a business score to secure the loan.


Like conventional mortgages, DSCR loan lenders also require you to make a downpayment. The DSCR loan Florida down payment ranges from 20-25% of the property cost or the loan amount.


Before the lender accepts your application, you should be willing to accept the DSCR loan Florida rates, which are usually 1-2% higher than normal mortgages.

DSCR loan rates in Florida are higher becadon’tenders don’t ask for bank statements, income statements, tax returns, and other documents.

How to Apply for a DSCR Loan Florida

  1. Assess your real estate business

Before you move around searching for a DSCR loan in Florida, you should first property’sr property’s cash flow to ensure you have a higher DSCR. A high DSCR, like that of 1:5, is good to enable you to manage your loan repayments on time.

  1. Get a Good lender

Search for a reliable mortgage lender who offers DSCR loans in Florida. Remember that not all lenders offer these loans, so you must be ready to get the best lender. We will show you the most convenient DSCR loan lenders in Florida. 

Once you get your preferred lender, ask them questions about the downpayment and the interest rates.

  1. Give the lender the details they need 

Give the lender what they need to start underwriting your loan application. This is the time they will assess your property and see its potential to generate income. They will also calculate your DSCR to know the amount of loan to give you.

If they approve your loan application, you can go ahead and get your down payment funds ready.

  1.  Get your down payment ready

As we’ve said, most lenders ask for a 20-25% down payment, whereby the exact amount varies from one lender It’snother. It’s good to have the cash ready to pay the lender.

Where to Get a DSCR Loan Florida

Griffin Funding

This lender specializes in bank statement loans, VA loans for veterans, and DSCR loans in Florida for real estate investors. The good thing about Griffin Lenders is that you can complete the application process online.

Whether you are operating a long-term rental property or a short-term rental like Airbnb, you can rely on this lender to get DSCR Florida loans.

With Griffin Lenders, you can get up to $5 million as a DSCR loan to invest in your next property. You will pay a very low downpayment of 20%. In addition, you should have a credit score of at least 620. However, you can use a business credit score if you have a bad one.

Griffin lenders accept a DSCR of .75. However, that comes with higher interest rates than loans with a DSCR of above 1.

DSCR Loan Florida

First FL Financial

This is another lender for DSCR loans in Florida. You can get a DSCR loan Florida starting from $150,000 and the maximum is $3 million. You get a 30-year fixed-rate DSCR loan which gives you a chance to spread the installments.

First FL Financial requires you to pay a downpayment of 20% and have a credit score of at least 660. In addition, the loan-to-value (LTV) should be 80%. 

Angel Oak Home Loans

This lender allows you to finance your new properties without proof of income. All you need is a high DSCR and you get a loan of up to $1.5 million. There is no limit to the properties you can finance with the DSCR loan.

Angel Oak provides the longest possible repayment terms of 40 years, with a fixed interest rate for the loans. 

Benefits of Florida DSCR Loans

  • DSCR loans are an excellent choice to help you invest in real estate
  • The downpayment is not huge
  • No need to prove your income or provide bank statements

Factors Affecting the Approval Rate For DSCR Loan Florida

Net Operating Income(NOI)

Your net income from your existing rental property is a great determinant of the DSCR loan you will get. Your NOI will determine whether your DSCR will be high or low. The higher your DSCR the faster the lenders will approve your loan.

Mortgage repayments

The mortgage payments you are making for your existing property will also determine whether the lender will approve your DSCR loan Florida. 

If your mortgage term is longer, you will have a higher DSCR don’tse you don’t take much from your rental income, which saves some income to use as NOI. 

In addition, higher mortgage interest rates reduce the chances of higher DSCR because it translates to higher repayments.

The Property’s Equity

The loan to property values ratio also affects the approval of DSCR loan Florproperty’se property’s value is larger than the loan amount, you will have a high DSCR.

On the other hproperty’se property’s value is lower than the remaining loan repayment, the DSCR will be low. As a result, the DSCR loan lender will not approve your loan.

Therefore, it’s advisable to apply for a DSCR loan in Florida if your current property mortgage is low so as to get a high DSCR.

Mortgage fees

Fees such as origination fees, prepayment fees, closing costs, and appraisal costs also affect the approval of a DSCR loan Florida.  


Indeed, you can grow your real estate portfolio using DSCR loan Florida. The best way is to ensure you have a good credit score and a high net operating income. 

If you don’t have a high net operating income, you can repay your mortgage for some time as you build equity. Furthermore, you can also build your credit score as you wait for the right time to apply for a DSCR loan Florida.

Feel free to leave a comment on your views about DSCR loans.

DSCR Loan Florida: Frequently Asked Questions

  1. What is the minimum DSCR to apply for a loan?

The minimum DSCR that most lenders recommend is 1:1. However, the higher it is, the better for you. Having more income than your loan repayments is an advantageyou’llse you’ll have enough for other purposes.

  1. What is DSCR in loans?

A debt service coverage ratio determines a coindividual’sividual’s creditworthiness and the ability to repay more debts. Investors who get DSCR loans have a high DSCR to help them manage the loans. 

Cecilia Malika

I have been a financial writer for the whole life of my writing career. I'm always versed in the current trends in the finance industry. My main goal is to educate as many people as possible about financial independence.

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