Rental / DSCR in Austin

Only with a valid City of Austin short-term rental license, and since July 1, 2026 that license is a revenue precondition rather than paperwork. As of that date booking platforms must carry the license number on every Austin listing, must remove a listing within 10 days of a city delist notice, and may not collect booking fees on unlicensed rentals. The city requires one license per unit, licenses are non-transferable, and terms now run up to two years: $836.30 for a new license and $385.30 to renew, as of mid-2026. Violations carry fines of up to $500 with each day treated as a separate offense. If you plan to underwrite to nightly income, get the license question settled before we size the loan, because an unlicensed Austin unit can be pulled off the platforms.

Because advertised rent overstates effective rent across most of this market. As of June 2026, 73% of Austin metro apartment units were advertising a concession, and metro apartment occupancy was roughly 86% to 88%, about three to four points under the national average. Blended median rent in Austin was about $2,517 in June 2026, down 6.63% year over year. Those are apartment and blended figures, not a single-family read, but they tell you what a tenant in this metro can negotiate. Free weeks and move-in credits are real money out of year-one cash flow, so we underwrite what the property actually collects. Run your own numbers first with the DSCR calculator.

Hard, and often higher than the seller's current bill. Combined all-entity rates typically run about 1.78% to 2.10% in Travis County and about 2.00% to 2.35% in Williamson County, depending on the school district, city, MUD, and any PID at the specific address. Two Texas rules matter for an investor. Investment property gets neither the homestead exemption nor the 10% homestead cap on appraised value. And the separate 20% circuit breaker cap on non-homestead property requires you to have owned the property for a full January through December year, so it does nothing in year one. Travis CAD applies it automatically to qualifying property valued at $5.16 million or less. It is authorized only for tax years 2024, 2025, and 2026 and expires after 2026 unless the Legislature extends it, so do not build a 2027 hold on it. We escrow to the go-forward assessed bill, not the seller's capped one. Talk to your CPA about your own tax position.

More than you paid three years ago, and it moves the ratio. The Texas Department of Insurance recorded statewide homeowners premium increases of 21.1% in 2023, 18.7% in 2024, and 4.3% in 2025, with the statewide average premium at $3,291 in 2024. Texas ranked fourth-highest in the country for home insurance premiums at the end of 2025. Texas also uses a file-and-use system, so insurers can put a rate increase in place before the state finishes reviewing it. Get a real bound quote on the subject property before you lock your assumptions. On a thin DSCR, a $600 swing in the annual premium is the difference between an approval and a decline.

It depends on whether your hold outlasts the supply wave. Greater Austin absorbed a large delivery of new apartments through 2025, which is what pushed occupancy and concessions where they are today. At the same time, metro building permits fell 29.5% year over year in March 2026, with multifamily down about 69% and single-family roughly flat. Less new supply entering the pipeline now generally means a tighter rental market on a two-to-three-year lag, which is the horizon a 30-year DSCR hold actually cares about. That forward read is our analysis, not a forecast we can source. Underwrite to today's collected rent, and treat any later rent recovery as upside rather than as the reason the deal works. See the DSCR program terms for leverage and structure.

Yes, and in Austin that matters more than usual. We start at 640, and credit moves both your rate and your leverage on a long-term rental loan. Here is why it compounds locally: with Austin rents soft, the DSCR test often binds before the LTV ceiling does, so if credit trims your leverage while the rent trims it too, the two stack. Run the rent number first. There is still no personal income test and no hard credit pull to start. Subject to underwriting.

20% at a minimum. We go up to 80% LTV, so on a rental at the $435,000 Austin-Round Rock-San Marcos median for July 2026 that is up to $348,000 from us and $87,000 from you (435,000 x 80% = 348,000). With Austin rents soft, the binding constraint is often the DSCR, not the LTV: the rent has to carry the payment at a ratio from 0.75, so a thin rent number can pull your usable leverage below 80% before the down payment ever does. Subject to underwriting.

No. $100K is the floor, up to $3M. Hays County's median sale price was $367,700 in July 2026, the lowest of the three metro counties, so that floor rules out very little here. If you are buying several doors under that number, a portfolio loan across 5 or more properties is usually the better structure than separate small DSCR loans. Subject to underwriting.

Prepay is a structure you choose, not a fixed penalty. We write flexible prepay structures on DSCR, and the right one depends on your hold. If you are buying an Austin rental to hold through the current soft patch and refinance later, say so early, because the prepay structure and the rate move together. Talk to us before you lock.