Question 1

What property tax rate should I put in my Dallas DSCR calculation?

Accepted Answer

The one for the exact city, school district and county combination, because "Dallas" is not a rate. On tax year 2025 rates compiled from the four central appraisal districts, City of Dallas with Dallas ISD in Dallas County totals 2.235030 per $100 of assessed value. Frisco with Frisco ISD in Collin County totals 1.675480, and the same Frisco and Frisco ISD combination in Denton County totals 1.630855. That is roughly 56 basis points of assessed value a year between the two ends, about $2,800 on a $500,000 property, which on most files moves the ratio more than the quoted rate does. Two more traps: a Dallas address can sit in seven different ISDs, running from 2.104563 with Highland Park ISD to 2.362101 with Lancaster ISD inside Dallas County, and MUDs, PIDs and other special districts sit on top of every total above. Some of those districts levy a full 1.000000 per $100 on their own. Pull the actual combination for the parcel, then run it through the DSCR calculator before you write the offer.

Question 2

Do the Texas homestead exemption and the appraisal cap help my rental?

Accepted Answer

No. Those are owner-occupant protections, and an investment property is assessed without them. The Texas homestead exemption and the 10% annual appraisal cap attach to an owner-occupied homestead, so the rental you buy is valued and taxed without either one. That matters twice. First, the seller's current tax bill is a bad proxy for your bill if the seller lived there, and plenty of out-of-state buyers underwrite the seller's number and then find the ratio short in year two. Second, with no state income tax in Texas, property tax is doing the work the income tax does elsewhere, so it is the largest line you can actually plan around. We underwrite to the go-forward assessed bill rather than the seller's. Confirm your own position with your CPA or property tax counsel.

Question 3

Can I underwrite a Dallas rental to short-term rental income?

Accepted Answer

Not safely, because the legal question is still open. Dallas passed two short-term rental ordinances in June 2023, one of them banning short-term rentals in single-family zoning districts. The Short-Term Rental Alliance sued, a Dallas County judge enjoined enforcement in December 2023, and the court of appeals sided with the operators three times during 2025. The city then petitioned the Texas Supreme Court on October 16, 2025 to lift the block so it could enforce the ban ahead of the 2026 FIFA World Cup, and no final ruling has been located. So the ban is unenforceable today and unresolved tomorrow. Neither side of that is settled, and anyone telling you Dallas short-term rentals are safe or dead is guessing. Arlington is the opposite case and is settled: the 2019 zoning amendments limiting where short-term rentals may operate survived a 2021 trial ruling, and the Texas Supreme Court denied the operators' petition for review in January 2022, so those restrictions stand. Our position on a Dallas file is to size the loan on long-term lease income that survives either outcome, and treat nightly revenue as upside. Check the current status of the case and the current city rules with your attorney before you close.

Question 4

What rent growth should I assume in Dallas as of mid-2026?

Accepted Answer

None, and then stress it down. Dallas single-family rents fell 2.2% year over year across the first half of 2026, with Dallas named among the underperforming Sun Belt markets. The MLS view is less negative: NTREIS closed leases across DFW in July 2026 showed average closed rent of $2.4K, down 0.1% year over year, on 4,613 closed leases, down 12.4%, with lease listings down 18.7% and lease months of inventory at 2.19, the tightest of the three segments. Those two readings capture different pools, MLS leases against a broader listing set, so the honest answer is flat at best. A file that only clears because rent rises 3% a year does not clear. Underwrite the rent the property collects today, budget 44 days on market between tenants on the July 2026 DFW lease figures, and keep the upside out of the ratio.

Question 5

If the hold stops working, what does the Dallas sale exit look like?

Accepted Answer

Slower than it was, and priced below list. DFW resale in July 2026 ran 6,610 closed sales, down 9.1% month over month and 1.3% year over year, with 28,293 active listings, 6.00 months of inventory, 58 days on market and a sold-to-original-list ratio of 94.9%. Six months of inventory is the balanced-to-buyer line, so a sale exit in that market is a quarter of carry plus a price concession, not a quick out. New construction is the tighter segment at 4.45 months, which tells you builder incentives are pulling buyers away from resale rather than that resale is strong. Those are July 2026 numbers and they move, but the shape of the decision does not: on a rental, plan to hold through a soft resale window rather than counting on selling into one. Longer terms and flexible prepay structures exist for exactly that reason, subject to underwriting.

Question 6

How does Texas foreclosure timing affect a rental loan here?

Accepted Answer

It runs on a fixed monthly calendar, which is why a workout window in Texas is short and predictable. Under Texas Property Code section 51.002, a sale under a power of sale in a deed of trust is a public auction held between 10 a.m. and 4 p.m. on the first Tuesday of the month at the county courthouse, or the first Wednesday if that Tuesday falls on January 1 or July 4. Notice must go out at least 21 days before the sale, posted at the courthouse door, filed with the county clerk and served on each debtor by certified mail, and where the debt is secured by the debtor's residence the servicer must first give at least 20 days to cure. In practice that means about three weeks minimum from posting to sale, and a sale date nobody negotiates. It is materially faster than a judicial-foreclosure state, which is part of why capital prices Texas rentals the way it does. The practical read for a borrower is that problems get solved early or not at all, so tell us the month a tenant issue starts rather than the month it becomes a default. This is a description of the statute, not legal advice, so talk to your attorney about your own file.

Question 7

What is a DSCR loan, and how do I qualify without tax returns?

Accepted Answer

A DSCR (debt service coverage ratio) loan qualifies on the property's rental income instead of your personal income, so there are no W-2s or tax returns required. We compare the rent, from a signed lease or the appraiser's market-rent estimate, against the monthly payment. A DSCR of 1.00 means the rent covers the payment, and we lend with a DSCR as low as 0.75.

Question 8

What rate and terms can I get on a rental loan?

Accepted Answer

Our rental program starts around 5.50% interest-only, with 30-year fixed and 5/7/10-year ARM options, for a single property or a whole portfolio. The lowest pricing goes to strong credit, lower leverage, and a DSCR above 1.20; your quote depends on the file and is subject to underwriting.

Question 9

How much can I borrow, and what is the maximum LTV?

Accepted Answer

We finance up to 80% loan-to-value on a purchase, with rate-and-term and cash-out refinances available, on loan amounts from $100K to $3M. Cash-out leverage is typically a little lower than purchase. The property's cash flow and your credit set your final leverage.

Question 10

What credit score do I need for a DSCR loan?

Accepted Answer

We start at 640, and the best pricing goes to strong credit. Because the loan qualifies on the asset, your score affects your rate and leverage more than whether you are approved.

Question 11

Can I get a DSCR loan on a short-term rental (Airbnb)?

Accepted Answer

Yes, short-term rentals are considered. We can underwrite using market or projected rents, and the property still needs to meet our DSCR. Tell us how the property is operated so we can structure it correctly.

Question 12

Is there a prepayment penalty?

Accepted Answer

Long-term rental loans usually carry a prepayment penalty, commonly a step-down such as 5/4/3/2/1. We offer flexible prepay structures, including buying down to a shorter penalty for a slightly higher rate, and we will lay out the options on your term sheet.

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