Question 1

How big is the student rental demand base around UNT and TWU?

Accepted Answer

Roughly 59,000 students enroll across the two universities against about 6,400 on-campus beds at UNT, so most of that demand sources housing from the private market. UNT's own Fall 2025 fact sheet counts 43,567 total enrollment against only 6,416 on-campus beds in 15 residence halls, with no married or family housing, which works out to on-campus beds covering roughly 15% of enrollment. TWU adds 15,424 more, though that figure spans TWU's Denton, Dallas and Houston campuses rather than Denton alone. Worth flagging before you size a deal on it: UNT enrollment has come down from about 46,300 in Fall 2024 to that 43,567 Fall 2025 figure, so the honest story is a large but slightly shrinking student base, not a growth story. A scattered-site portfolio of small, similar houses near campus is a natural DSCR structure here, and portfolio financing can carry several of them on one loan.

Question 2

Should I underwrite the same rent growth in Denton proper as in the southern suburbs?

Accepted Answer

No. Underwrite the submarket, not the county. Zillow's rent index puts Denton city rent at $1,480 in June 2026, down 4.1% year over year, while Flower Mound rent rose 3.2% to $2,404 and Corinth rose 1.6% to $1,798 over the same period. Denton city is a student-and-multifamily market absorbing supply against that slightly smaller UNT enrollment; the southern county is a family single-family-rental market with a different tenant base entirely. A DSCR file on a Denton house near campus and one on a Flower Mound house do not carry the same rent-growth assumption, and we size the loan on the actual in-place lease rather than a county-wide average either way.

Question 3

What does the property tax stack look like on a Denton rental?

Accepted Answer

Budget close to $1.99 per $100 of value inside the city of Denton, before any special district, and expect no relief for being a rental. Stacking Denton County's FY 2025-2026 rate of $0.185938 per $100, the City of Denton's $0.595420 per $100 (adopted 2025-09-16, itself a 7.4% increase), and a Denton ISD rate reported around $1.2069 gets you to roughly $1.99 per $100 before special districts. That math assumes no homestead exemption and no 10% homestead appraisal cap, because neither applies to investment property, including the 2025 statewide homestead increase. Outside city limits on the US-380 corridor the number moves again: Ownwell's compilation puts Savannah's effective rate at 2.22%, the county's highest, and Paloma Creek sits inside five separate Fresh Water Supply Districts that each tax on top of the base stack. Confirm the parcel's actual jurisdictions with Denton Central Appraisal District before you close, and run the real number through the DSCR calculator. Your CPA is the right person for the planning side.

Question 4

Can I underwrite short-term rental income on a Denton property?

Accepted Answer

Only after you confirm the parcel clears three specific gates, and we size the loan on long-term lease rent regardless. Denton's short-term rental rules, tightened effective January 1, 2025, require annual registration at $100, cap residential-district registrations citywide at 1,000 with a maximum of two certificates per parcel, and require 100 feet of separation between short-term rentals in residential zoning. In mixed-use and commercial districts there is no separation rule and no count against the cap, but no more than 10% of units in a multifamily development may register. Short-term rentals are barred outright in light industrial, heavy industrial and public-facilities zoning, and the city adds a 7% hotel occupancy tax on top of the state's 6%. The city's packet does not say whether a certificate transfers to a buyer at sale, so treat it as non-transferable until the city says otherwise, and confirm zoning, cap room and separation distance before counting on nightly income, and we underwrite the property on its long-term lease rent either way. We have not found rules for Lewisville, Flower Mound, Little Elm or Corinth, and Texas has no statewide preemption, so do not assume Denton's rules apply to a neighboring city.

Question 5

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 6

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 7

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 8

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 9

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 10

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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