Investment Property Loan Austin
Three paths for Austin investors: conventional non-owner-occupied, DSCR, and portfolio. Here is how each one qualifies, who fits, and how Texas property tax affects the DSCR math.
An investment property loan in Austin is any mortgage on a residential property the borrower does not occupy as a primary residence. Three common paths: conventional non-owner-occupied (qualified on borrower income with reserves), DSCR (qualified on the property's rental income divided by its debt service), and portfolio or non-QM (held by the originating lender, with looser documentation). Why it matters in Austin: Texas property tax rates (Travis County around 2.10%, Williamson around 2.25%) materially compress DSCR ratios versus low-tax states, which changes which scenarios qualify on the same gross rent. Not allowed: FHA and VA cannot be used for investment-only purchases.
Key facts
- Three program families: conventional non-owner-occupied, DSCR, portfolio / non-QM
- DSCR qualifies on rent ÷ PITIA (principal, interest, taxes, insurance, association dues) rather than borrower income
- Texas property tax compresses DSCR: Travis ~2.10%, Williamson ~2.25%, Harris ~2.15%, vs ~1.0% national average
- Conforming limit applies: $832,750 on one-unit conventional investor (FHFA, 2026); jumbo above
- FHA and VA not allowed on investment-only purchases (primary-residence rule)
- House-hacking a two-to-four-unit FHA or VA file is allowed if the borrower lives in one unit
- Scaling past 10 financed properties requires portfolio / non-QM (Fannie limits at 10)
- Short-term rental files: investor specific underwriting; some lenders ineligible for full STR income
Conventional investor vs DSCR vs portfolio
Three common paths for Austin investors. The right path depends on the file, not the program.
| Path | Qualifies on | Property cap | Notes |
|---|---|---|---|
| Conventional non-owner-occupied | Borrower income + assets + DTI | Conforming ($832,750) or jumbo | Fannie limits at 10 financed properties |
| DSCR | Property rent / PITIA | Conforming or jumbo (non-QM) | Texas tax rates compress DSCR |
| Portfolio / non-QM | Borrower or property; flexible | Often higher than agency | For scaling past 10 properties |
| House-hack FHA / VA | Borrower income (occupant) | County FHA limit / no VA limit (full) | Must owner-occupy one unit |
Who this fits (and who it does not)
Conventional investor fits
- Investor with W-2 or self-employed income strong enough to absorb the new DTI
- Strong reserves (six months PITIA on each financed property is common)
- Below the 10-financed-property Fannie limit
- Borrower wants the cheapest conventional pricing
DSCR fits
- Investor whose personal DTI does not work for conventional
- Self-employed investor with write-down-heavy returns
- Scaling investor at or past the Fannie 10-property limit
- Property cash-flows after Texas property tax and insurance (DSCR around 1.0 or higher)
- Files where speed to close matters more than the lowest rate
Portfolio / non-QM fits
- Scaling past 10 properties
- Short-term rental files with non-standard income evidence
- Cross-collateral structures across multiple properties
- Investor wants flexibility on documentation beyond conventional and DSCR
Investor programs do not fit
- Property is or will be a primary residence (use FHA, VA, or conventional owner-occupied)
- Second home / vacation home (use second-home conventional)
- Mixed-use property with commercial component over typical residential thresholds (use commercial)
- Property does not cash-flow after Texas property tax and insurance, and personal DTI does not support conventional
How I handle these files
I run every Austin investor file across all three program families before recommending. The cheapest option is not always conventional, particularly for self-employed investors with tax-strategy-heavy returns. DSCR may price 50 to 150 basis points above conventional but qualifies on properties conventional cannot, and for scaling investors that difference is often worth it because it unlocks the next deal.
On the DSCR side, Texas is a structurally tougher state for the ratio because property tax rates of 2.0 to 2.5 percent of value (Travis around 2.10%, Williamson around 2.25%, Fort Bend around 2.40%) eat into the rent-to-PITIA ratio. A property that runs 1.20 DSCR in Tennessee may only run 1.05 DSCR in Travis County on the same gross rent. I model this before we write an offer. Many investors who run the math conclude that Hays, Bastrop, or Williamson outer counties are better DSCR territory than core Travis.
On scaling: Fannie Mae caps borrowers at 10 financed properties. Past 10, you are looking at portfolio or non-QM. I work the lender network to find the cleanest path for the file at hand.
I am Austin-based and licensed statewide in Texas. Send me the address, the expected rent, and how many properties you have today; I will run the DSCR math and tell you which program family the file lines up with.
Sources & methodology
All figures verified against primary sources as of May 26, 2026.
Common questions
What is a DSCR loan in Austin?
A DSCR (debt service coverage ratio) loan qualifies on the property's rental income divided by its full housing expense (principal, interest, taxes, insurance, association dues). It does not require borrower income documentation. It is a non-QM program. Pricing typically runs above conventional but qualifies on properties conventional cannot.
Why does Texas property tax matter for DSCR?
DSCR = rent / PITIA. Texas property tax rates run 1.5% to 2.5% of value (Travis County around 2.10%, Williamson around 2.25%, Harris around 2.15%), versus a national average closer to 1.0%. The Texas-specific PITIA is higher on the same property value, which compresses the DSCR ratio. Many investors who run the math expand into Texas outer counties where tax rates are lower.
Can I use FHA or VA for an investment-only property in Austin?
No. FHA and VA require the property to be your primary residence. The exception is house-hacking a two-to-four-unit property where you live in one unit; the other units can generate rental income that helps qualify the file.
What is the Fannie Mae 10-property limit?
Fannie Mae limits a borrower to 10 financed one-to-four-unit residential properties total. Once you are at 10, the next property generally needs to go portfolio or non-QM. I structure the path to keep agency financing in play as long as it is the cheaper option.
Do investor loans require a bigger down payment?
Yes, typically. Conventional non-owner-occupied generally requires more down than primary-residence purchases. DSCR programs commonly run 20 to 25% down. Specific minimums depend on the investor and the file.
Can DSCR loans be closed in an LLC?
Yes, most DSCR programs allow LLC closing. Conventional non-owner-occupied generally closes in the borrower's name (personal). I structure based on the borrower's portfolio plan.
How long do investor files take to close in Austin?
Conventional investor files run 21 to 30 days when documentation is clean. DSCR files run 25 to 35 days. Portfolio files vary by lender; typically 30 to 45 days.
Are investor cash-out refinances allowed in Texas?
Yes, on investment properties (not Texas homesteads). The Texas Constitution 50(a)(6) restriction applies only to homestead cash-out, not investor properties. Conventional and DSCR cash-out refis on non-homestead investor properties are routine.
Austin investor file?
Send me the address, expected rent, and how many financed properties you have today. I will run DSCR math, conventional math, and tell you which path the file lines up with.