Question 1

Why does the Fort Hood housing allowance matter for my DSCR number?

Accepted Answer

Because it sets both the floor and the ceiling on what a Killeen-area rental collects. The 2026 basic allowance for housing at the Fort Hood military housing area (MHA TX286) runs from about $1,374 without dependents up to $1,695 with dependents for junior-enlisted grades (E-1 to E-5), rising to $2,070 for an E-7 with dependents. Metro rents track that band closely: the Zillow Observed Rent Index put single-family rent at $1,649 for the metro in June 2026, while city-level rent was $1,254 in Killeen proper and $1,612 in Harker Heights. A tenant's housing budget is federally funded, published, and resets every year, which supports collection but also caps what the market bears. Price a 3-bedroom above the E-6 BAH tier ($1,920) and you are underwriting to a much smaller pool of tenants. Run your own numbers with the DSCR calculator before you lock a rent assumption.

Question 2

How should I model vacancy on a Killeen rental with a military tenant?

Accepted Answer

As turnover risk built into the lease, not as a surprise. Under the federal Servicemembers Civil Relief Act (50 U.S.C. section 3955), a tenant with PCS orders or deployment orders of 90 days or more can terminate a residential lease with written notice and a copy of orders; on a month-to-month lease the termination is effective 30 days after the next rent due date, and no early-termination fee applies. Every military tenant in this metro carries that break clause, and it is the structural reason Fort Hood's rental market turns over as fast as it does, feeding a steady stream of make-ready and light-rehab work along with it. We do not treat a Killeen DSCR file like a stable-tenant suburban file; budget the turn.

Question 3

What does Bell County property tax actually cost a non-homestead investor?

Accepted Answer

Roughly 2.0% of assessed value a year in Killeen proper, with no homestead relief because you are not living in it. The Bell County Appraisal District's 2025 table works out to about 2.00 per $100 of value inside Killeen: county 0.3128, road district 0.0199, city 0.7014, Killeen ISD 0.8778, and Central Texas College 0.09. Temple runs heavier at roughly 2.17 (2.37 with Temple College) because Temple ISD (1.1372) and Temple College (0.2017) both run well above their Killeen-side counterparts. Both cities raised rates for fiscal 2026: Killeen adopted 70.14 cents per $100, an 8.2% increase, and Temple adopted 69.99 cents, up 11.72%. Check for a MUD overlay before you underwrite carry: Bell County MUDs run 0.783 to 1.000 per $100 on top of the base stack, which can push a new-build parcel's total near or above 3%. Talk to your CPA about how this lands on your own return.

Question 4

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

Accepted Answer

In Killeen city limits, yes, with a permit. Killeen legalized and now licenses short-term rentals under an ordinance effective October 2023: every STR needs an annual permit through the city's registration portal, priced at $200 for the initial permit and inspection, $100 for annual renewal, and $75 for a re-inspection, with no density cap. Registration opened in May 2024. Before you build a nightly-income model, confirm current insurance and hotel occupancy tax obligations directly with the city; secondary sources describe a $500,000 minimum liability requirement and self-remittance of local hotel occupancy tax, but that detail has not been confirmed against the ordinance text. Temple's short-term rental posture was not sourced this pass, so do not assume Killeen's rules carry over there.

Question 5

Which Killeen-area submarket pencils best for a buy-and-hold DSCR deal?

Accepted Answer

On raw gross yield, Killeen and Temple lead, but the tax and tenant story differ enough to matter. As of June 2026, Killeen's $1,254 city-level rent against a $220,742 mid-tier home value works out to about a 6.8% gross yield; Temple's $1,428 rent against $249,750 in value runs about 6.9%; Harker Heights runs closer to 6.4% on a $1,612 rent and $300,200 value. Killeen carries the lower property tax stack of the two (roughly 2.0% versus Temple's 2.17%) because Killeen ISD's rate sits well under Temple ISD's, but Temple's economy leans on Baylor Scott & White Health and its logistics employers rather than Fort Hood directly, which is a different tenant base than the BAH-anchored demand around the post. Neither figure is a cap rate; it is rent over value with no expenses netted out, so run your own operating numbers before you commit.

Question 6

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 7

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 8

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 9

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 10

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 11

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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