Rental / DSCR in McAllen

Yes, by an unusually wide margin for a market this size. ATTOM's 2025 Single-Family Rental Market Report named Hidalgo County, which is the McAllen metro, one of 28 "SFR Growth" counties nationally: places where average wages grew over the prior year and the potential 2025 annual gross 3-bedroom rental yield exceeds 10%, against a 7.45% national average across the 361 counties ATTOM analyzed. ATTOM did not publish Hidalgo's exact decimal, only that it clears 10%. A cross-check on index data points the same direction: metro single-family rent (Zillow ZORI single-family series) ran $1,811 a month in June 2026 against a $195,624 mid-tier home value, an 11.1% gross annualized rent-to-price ratio, well above a metro like Tampa at roughly 7.7% on the same math. That is gross of taxes, insurance, and management, which the next question shows are not small here. Run your own numbers with the DSCR calculator.

More than most out-of-state investors expect, and it's the line that decides a thin deal. A McAllen-city rental inside McAllen ISD stacks Hidalgo County (0.5750), the county-wide Hidalgo County Drainage District #1 (0.1123), the City of McAllen (0.449989 for FY 2024-25), and McAllen ISD (0.9322 per $100) to roughly 2.07 before the South Texas College levy, so a true total north of 2.1%. Pharr, in PSJA ISD, stacks closer to 2.47 plus the college rate. On a $195,624 median-value rental at a 2.1% to 2.5% combined rate, that is $4,100 to $4,900 a year in property tax alone, or roughly 2.7 to 3.2 months of the metro's $1,811 median single-family rent. Texas gives investment property no homestead exemption and no 10% appraisal cap, so the assessed value can climb with the market year after year with nothing to hold it down. We size the loan on what the property actually nets after that stack, not the headline yield. Talk to your CPA about your own tax position.

Only against a valid short-term rental permit for the city the property sits in. McAllen regulates rentals under 30 days through Code of Ordinances Chapter 46, Article VII: operators need a permit and an annual business license, must comply with the noise and nuisance articles, must collect hotel occupancy tax and file a monthly HOT report with the city, must keep smoke detectors in every advertised sleeping space, and must give guests a conduct brochure. A revoked permit bars the same property from reapplying for 12 months. We could not confirm the current text on an owner-occupancy requirement, so do not assume pure investor STRs are unrestricted in McAllen until you've read the current ordinance. STR rules for Edinburg, Mission, Pharr, Weslaco, San Juan, Harlingen, and Brownsville were not sourced for this page. Texas has no statewide STR preemption, so treat eligibility as a city-by-city question and confirm the current ordinance for the specific address before we underwrite nightly income.

A working, growing population at rents well below the national median, which is the whole thesis of this market. Hidalgo County's median household income was $55,829 in 2024, roughly two-thirds of the US median, and that caps achievable rents even as the county keeps adding people: about 921,549 residents in 2025, up nearly 49,000 since 2020. City-level rents (Zillow ZORI, June 2026) run from $1,019 in Edinburg to $1,341 in Mission, with McAllen itself at $1,283 and Pharr at $1,207; most of Hidalgo County's city rents were flat to slightly down year over year, the one clear exception being Brownsville in Cameron County at +5.5%, tied to the SpaceX build-out. The spread between a $1,000 rent and a $1,300 rent decides a Valley DSCR deal more than the note rate does, so confirm actual comparable rents for the specific city and submarket before locking your numbers.

Flood, plan for it; windstorm, it depends which side of the county line the property sits on. Hidalgo County is not in the Texas Windstorm Insurance Association's 14-county coastal catastrophe area, so a McAllen, Edinburg, or Mission property buys standard-market wind coverage. Cameron and Willacy counties, covering Harlingen and Brownsville, are inside TWIA's territory, and structures built or altered since 1988 there may need a TWIA policy plus a WPI-8 windstorm certificate. Flood is the shared peril across the whole Valley: storms on June 24-25, 2019 dropped 12 to 18 inches of rain, nearly 1,200 homes were destroyed or needed major repair, and the President issued a major disaster declaration for Cameron, Hidalgo, and Willacy counties. Check the FEMA flood zone on any parcel you're financing and price flood coverage as its own line item, not an assumption. We didn't find county-level average premium dollar figures for Hidalgo or Cameron, so get a bound quote on the subject property before you lock your DSCR assumptions.

The program runs $100,000 to $3M at up to 80% LTV. On a $200,000 McAllen rental that is up to $160,000 from us and $40,000 from you (200,000 x 80% = 160,000), on a 30-year fixed or a 5, 7, or 10-year ARM. Watch the floor: the metro's mid-tier value was $195,624 in June 2026, the lowest of the 100 largest US metros in Zillow's index, so a low-basis Valley door can put the loan under $100,000. Bring us the purchase price early and we will tell you whether it clears. Subject to underwriting.

Credit starts at 640 here, and strong cash flow does not replace it. DSCR underwriting leans on the asset: we size the loan on the rent the property actually produces, with DSCR from 0.75, and there are no W-2s, pay stubs, or tax returns in the file. Credit is still a gate at 640, unlike our asset-based flip and bridge programs, which carry no minimum score. A McAllen door that clears the yield test with a thinner score is a conversation about a different program, not an automatic no. Subject to underwriting.

Prepay runs on flexible structures, so it depends on the one you take. This is a long-term product, 30-year fixed or a 5, 7, or 10-year ARM, and the prepay terms are set with the loan rather than fixed across the board. If a McAllen exit inside a few years is realistic, say so before we structure it. If you plan to hold the door, a different structure usually prices better. Ask for the prepay terms in writing before you close. Subject to underwriting.