A DSCR (Debt Service Coverage Ratio) loan is the most powerful tool available to Florida real estate investors who want to scale without showing personal income. Instead of W-2s, tax returns, or pay stubs, the lender looks at one thing: does the property pay for itself?
What Is DSCR and How Is It Calculated?
DSCR = Gross Monthly Rent ÷ Monthly Principal, Interest, Taxes, Insurance, and HOA (PITIA). A 1.0 DSCR means the property breaks even. A 1.25 DSCR means the property generates 25% more income than the debt payment. Most lenders want 1.0–1.25. Some will go as low as 0.75 with a larger down payment.
What Lenders Actually Look At
The loan amount is based on the property value, not your income. Most DSCR lenders want a minimum 620–680 credit score, 20–25% down on purchases, and a property that is currently rented or market-rent-ready. The lease or an appraisal rent schedule (Form 1007) is used to determine income. If you have a strong tenant in place at market rent, you're in good shape.
Florida-Specific Factors That Affect DSCR
Florida properties carry higher insurance premiums than most states due to hurricane exposure. This directly impacts DSCR because insurance is included in PITIA. In coastal markets like Miami Beach, Boca Raton, or Naples, flood insurance can push monthly PITIA up significantly. Make sure your rent covers the full insurance load — not just what you budgeted before getting a real insurance quote.
Short-Term Rental (STR) DSCR
Some lenders will use Airbnb and VRBO income to qualify DSCR loans. You'll need at least 12 months of documented STR income or a market STR analysis from a service like AirDNA. STR DSCR loans are available in most Florida markets but typically require higher reserves and slightly higher rates. Seasonality is a factor — lenders may underwrite on a trailing 12-month average to smooth out peaks and troughs.
Pro tip: On a new purchase without rental history, request an appraisal with a 1007 rent schedule. The appraiser will estimate market rent, which most lenders accept in lieu of an actual lease.
DSCR Loan Terms in Florida
Typical DSCR loans offer 30-year fixed or ARM options, interest-only periods, and no prepayment penalties on some products. Rates start in the mid-5% range for well-qualified borrowers at lower LTV, moving higher for higher leverage or lower DSCR. The loan process from application to close typically runs 2–4 weeks.
