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Program 02
Rental / DSCR in Galveston
Long-term DSCR loans for Galveston County rental investors.
Hold your rentals with financing that underwrites the asset, not just you. DSCR as low as 0.75, rates from 5.5% interest-only, and 30-year fixed options for single properties or whole portfolios. On the island itself, gross rental yields run at the low end of the county, while mainland cities like Texas City and Dickinson pencil better for a straight buy-and-hold; a short-term rental income underwrite here has to be tied to the buyer's own operating licence, not the seller's. Business-purpose only, and rates and structure are set in underwriting.
0.75
min DSCR
5.5%
rates from
30-yr
fixed avail.
80%
max LTV
Typical figures, subject to underwriting and market conditions. Not a commitment to lend.
How it works
No tax returns or personal income docs in most cases. We qualify on the property's cash flow, so you can scale your portfolio without the paperwork drag of conventional lending.
Who it's for
Buy-and-hold investors
Single rentals and portfolios
Short-term rentals considered
Rate/term and cash-out refi
Typical terms
Loan amount$100K to $3M
Max leverageUp to 80% LTV
DSCRFrom 0.75
CreditFrom 640
Term30-yr fixed / 5-7-10 ARM
RateFrom 5.50% IO*
PrepayFlexible structures
*Typical terms, subject to underwriting and market conditions.
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Local FAQ
Rental / DSCR in Galveston, answered.
If I buy a short-term rental in Galveston, does the seller's rental licence transfer to me?
No. Galveston's short-term rental licence is nontransferable, and a buyer must obtain a new licence before operating. Under Ordinance 25-060, an annual city licence runs January through December, and when a property changes ownership the new owner must get a new licence and a new Galveston Vacation Rental (GVR) number before advertising or operating the unit. Any DSCR file underwritten on the seller's short-term rental income should be conditioned on the buyer's own licence and GVR number, not the seller's operating history.
Does a Galveston Island rental actually cash flow as a long-term hold?
Not as easily as the mainland cities in this county. As of July 2026, Galveston city's gross rental yield sits at the low end of Galveston County, well behind Texas City and Dickinson on the mainland, and that gap widens once the island's property tax stack, a TWIA windstorm policy, and a flood policy are layered on. The honest read: the island functions more as a short-term-rental or second-home market than a straight workforce-rental market. Run the DSCR math against actual market rent for the specific property and submarket, not a county average. If the rent alone won't carry the loan, our Galveston conventional program qualifies on your documented income instead.
How much does Galveston's hotel occupancy tax cut into a short-term rental's DSCR income?
Model 15% off gross booking revenue before cleaning, platform fees, and management. A Galveston short-term rental owes a combined 15% hotel occupancy tax: 6% to the State of Texas and 9% to the City of Galveston. A monthly tax report is required even in a month the unit sits vacant, and the city audited 128 short-term rental taxpayers between 2022 and 2025 for under-remitted tax. Treat the 15% as a fixed deduction off the top of any STR pro forma before you calculate DSCR, not a rounding error.
If I hold a Galveston short-term rental through a slow season or a workout, do I risk losing my ability to operate it?
Yes, if the unit sits unregistered for a full year. A Galveston short-term rental established before a zoning change is treated as a legal nonconforming use, but that protection is lost if the property goes unregistered for more than 365 consecutive days, or if short-term rental use is discontinued for 365 days for any reason. That clock matters on a property taken back, held through litigation, or sitting vacant between owners. There is currently no density cap or occupancy cap on island short-term rentals, though the city's own ad hoc committee said it needs at least two years of operating data before considering one, so do not assume today's rules hold for the full term of a five-year DSCR loan.
What does Galveston actually require to legally operate a short-term rental once I close?
An annual city licence, a $250 per-unit fee due by December 31, and a local contact who can respond to complaints within one hour, around the clock. The licence must display a Galveston Vacation Rental number on every listing, and the application requires a local contact person within one hour's drive of the property, available 24 hours a day and seven days a week, who must respond in person or by phone within one hour of a complaint and resolve it within two. Registering after December 31 for the coming licence year adds a $500 late fee. Build the $250 fee and the operating requirements into your first-year budget alongside insurance and taxes.
If I'm financing rentals in both Galveston and League City, are the short-term rental rules the same?
No, they're two separate regimes with their own paperwork. Galveston's short-term rental licence, GVR number, and hotel occupancy tax filing run through the City of Galveston under Ordinance 25-060. League City requires its own short-term rental permit from its Building Department, renewed annually, with the permit number displayed on listings and hotel occupancy tax reported through Rentalscape on a quarterly basis. Underwrite each property against the rules of the city it actually sits in, not the county as a whole, and confirm current requirements with each city before closing, since fee and rate detail for League City's regime is not fully published.
How much do I need to put down on a Galveston County DSCR loan?
Plan on 20% of the purchase. We go to 80% LTV on this program, so on a $400,000 Galveston County rental that is up to $320,000 from us and $80,000 from you (400,000 x 80% = 320,000). The property's rent has to carry the loan too: we work from a DSCR as low as 0.75, but the island's gross rental yields sit at the low end of the county, so a Galveston Island property sometimes needs more than the minimum down to make the coverage work. Mainland doors in Texas City or Dickinson usually get there sooner. Subject to underwriting.
Is there a minimum loan size on a Galveston DSCR loan?
Yes. $100,000 is the floor and $3 million is the ceiling. Terms run 30-year fixed or a 5, 7, or 10-year ARM, with flexible prepay structures rather than one fixed penalty, which matters on a Galveston property you might sell into a strong season rather than hold for thirty years. Tell us the exit you actually expect and we will size the prepay around it. Subject to underwriting.
Does the 640 credit minimum change if my Galveston rental is a short-term rental?
No. DSCR starts at a 640 credit score whether the unit is a long-term lease or a short-term rental. What changes for a Galveston short-term rental is the income side, not the credit side. The city licence is non-transferable, so we underwrite the rent against your own licence and Galveston Vacation Rental number, not the seller's operating history, and the 15% combined hotel occupancy tax comes off gross booking revenue before the coverage math. No tax returns and no W-2s either way. Subject to underwriting.
More Rental / DSCR questions, answered on the program page
Resources
Guides for Rental / DSCR
Rental / DSCR · 5 min read
What Is a DSCR Loan? How Investors Qualify on Rental Income
Read the guide Strategy · 6 min read
Financing the BRRRR Method: Buy, Rehab, Rent, Refinance, Repeat
Read the guide Rental / DSCR · 5 min read
DSCR vs Conventional Loan: Which Is Better for Investment Property?
Read the guide Rates & Costs · 5 min read
Hard Money Loan Rates and Costs, Explained
Read the guide More in Galveston
Other programs in Galveston
Fix and FlipUp to 90% / 100% rehabGround-Up ConstructionUp to 70% LTV, most statesCRE BridgeUp to $10M, 24-36 moTransactional FundingSame-day double-close capitalBank Statement / No-DocNo tax returns requiredConventional InvestmentNon-owner-occupied investmentPortfolio LoansMultiple properties, one loanCRE PermanentLong-term agency & permSBA Financing7(a) & 504 placement
About the local figures on this page
Local rules move. Every tax rate, fee, ordinance and market figure here comes from a primary source and carries the date we read it, and we correct them as the rules change. Where a number is mid-change or we could not verify it, we say so rather than guess. Before you commit a budget, confirm anything that drives it with the city or county, and talk to your attorney or CPA on questions of law or tax.
Published by USA Mortgage Funding, LLC, NMLS #152588. Researched from primary sources by our team, drafted with AI assistance, and every figure checked against its source before publishing. Where an answer rests on a public record, that record is linked under it. Figures read on 2026-08-22.
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