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DSCR Loans in Polk County, Florida: No-Doc Way To Build Your Real Estate Portfolio Quickly

Need a real estate investment property mortgage to expand your portfolio in Polk County, Florida? Finding the perfect solution for your needs can be challenging with all the different mortgage options. One alternative you might want to look into is a DSCR loan. DSCR loans are no-income mortgages that can help you get the cash you need for your real estate investment based on your home's cash flow.

DSCR loans use the debt service coverage ratio as the primary qualification metric. And better yet, they come with competitive interest rates that can help you save thousands of dollars over the life of your loan.

Read on to learn more about DSCR loans in Polk County and whether it's a viable solution for your needs.

Why Get a DSCR Loan in Polk County, Florida

Traditional loans in Polk County need you to pay stubs, submit tax returns and go through a complex loan application process. DSCR loans, on the other hand, are a non-QM mortgage type that allows you to skip many of the hassles of buying and owning real estate and property management. The QM in non-QM loans stands for "qualifying mortgage" - a lending procedure involving analyzing your current employment status, DTI ratio, assets, and more.

If you're unable to qualify for a traditional loan, you may opt for a non-QM DSCR loan to save your time and make it easier for you to invest. Such asset-based loans allow you to get a loan based on your property's rental income and debt obligations.

That said, if you wish to invest in real estate in Polk County but can't qualify for conventional loans, DSCR mortgages are a perfect alternative that can assist you in expanding your investment portfolio faster.

Other vital benefits of DSCR loans include the following:

  • Unlimited cash-out. With DSCR loans, you can take out as much money as you need and when you need it. This makes it a smart loan option, especially if you may need to cover significant expenses unexpectedly.

  • With DSCR loans, you can obtain many mortgages for different homes simultaneously. You can commit to many homes simultaneously. Some loans allow investors to engage in only one property at a time. You can't apply for a second loan unless you've repaid your previous one.

  • They have quicker mortgage application and closure times. Since you won't be explaining gaps in your job history or submitting personal financial information, DSCR mortgages usually have a streamlined and quick application process.

DSCR loans in Polk County are also perfect for seasoned and novice investors. If you're a novice real estate investor, these loans will help you get started and set you on the right track. And if you're a seasoned investor, a DSCR mortgage can provide all the fundings you need to finance your real estate investments and take your organization to the next level.

How Does a DSCR Loan Work?

If you want to apply for DSCR loans in Polk County, you probably have questions about how they work. These loans are usually used to buy investment homes. They are a viable option for those who can't qualify for regular loans or don't want to follow the complete documentation mortgage process.

Unlike traditional loans, DSCR loans in Polk County compare your property's annual rental income to its annual debt obligations. This number is your DSCR, and lenders usually use it to determine whether or not you're eligible for a mortgage.

Remember, debt service coverage ratio loans essentially work similarly in every state. The only factor that changes from one state to the other is the cost of a home and its average rental value.

How is DSCR Loan Calculated in Polk County, Florida?

DSCR is usually expressed as a decimal, i.e., 1.25x or 1.25. These loans compare rental income against loan payments for residential homes. For instance, a home with a monthly loan payment of $1250 and a rental income of $1,500 has a DSCR of 1.2x or 1.2.

Remember that the higher the debt service coverage ratio, the greater the chances of securing a DSCR loan. Most lenders in Polk County need a minimum DSCR of 1.25 and 1.2.

Here's how you can calculate DSCR - To calculate your DSCR, divide your rental income by the payment amount.

DSCR = Income / Payment

Let's break it down further by looking at an example of an investment home with a rental income of $5000 and a loan payment of $4000. In this example, to determine your debt service coverage ratio, divide your monthly rental income by the monthly mortgage payment amount as follows:

$5,000 ÷ $4,000 = 1.25

Since this home has a DSCR of 1.25, it has 25% more cash flow than is required to meet monthly mortgage payments.

An example of how higher rent can help improve DSCR

Income Payment DSCR
$4,500 $4,000 1.13
$4,750 $4,000 1.19

An example of how lower payment can help improve DSCR

Income Payment DSCR
$4,500 $4,750 0.95
$4,500 $4,300 1.05

To increase your chances of DSCR loan approval, try and look for ways to improve your home's potential income or minimize loan payments.

How to Determine DSCR Income

Lenders will only need your total monthly rental income if you own residential properties to determine your debt service coverage ratio. On the other hand, you'll need the net operating income (NOI) for commercial properties.

This is the gross operating income minus all business operating expenses, such as utilities, insurance, property management fees, repairs, and maintenance.

How to Determine DSCR Loans Payment

The debt service coverage ratio payment for residential and commercial properties is the proposed loan payment for your new home, including insurance, taxes, interest principal, homeowner association (HOA) fees, and other dues.

What is the Minimum DSCR Loan to Qualify in Polk County, Florida?

If you want to secure DSCR loans, it's crucial to know what is needed of you. Some lenders need a DSCR of as low as 0.75 to secure a loan. Other lenders will only consider investment homes with a minimum ratio of 1.25. Generally, lenders use your debt service coverage ratio to determine whether your home's rental income is enough to cover taxes and loan payments.

Aside from ensuring you meet the specified threshold, it would help if you were prepared to present additional documentation throughout the loan application process. This will be used to confirm all the details provided for the calculation.

House models arranged on stacked coins at table

DSCR Loan Guidelines in Polk County, Florida

Qualifying for DSCR loans in Polk County is more straightforward than many traditional loans. For starters, you need to be a borrower who wants to invest in rental homes. You can't use DSCR loans to buy owner-occupied properties, so you'll have to consider other non-QM loans, like interest-only loans.

And because these loans don't need personal income verification, you don't need to provide copies of your tax returns or any other income documentation.

Although lender requirements can vary, many follow these guidelines for DSCR mortgages in Polk County, Florida.

  • Loan-to-value (LTV) ratio - For new loans, DSCR mortgages need investors to have a down payment of about 20-25% or an LTV ratio of roughly 75-80%.

  • Credit/FICO Score - A credit score ranges from 300 to 850, which rates your creditworthiness. Like most traditional loans, many lenders require a minimum score of 640, although some will consider lower FICO scores.

  • Loan purpose - You can use DSCR loans to buy houses or refinance existing investment properties - either cash-out or standard refinance.

  • Verifying the home's future rental income - As part of the qualification process, Debt service coverage ratio loans require investors to complete a Comparable Rent Schedule (Fannie Mae Form 1007) with the help of an appraiser. Depending on the local market analysis, this is usually done to determine your home's potential rental income.

  • Property types allowed - As an investor, you can use DSCR loans to buy or refinance homes with up to 4 units, condos, single- and multi-family residences, and apartment buildings of 5+ units, among others.

  • Property use - You can only use DSCR loans for investment/ rental homes - no investing in primary residences. These properties can be extended or short-term rentals and other home rental formats.

  • Loan Type - The most popular DSCR mortgage type is the 30-year fixed-rate loan. Other loan types are also available, such as interest-only, 40-year fixed, and adjustable rates.

  • Maximum loan limit - Depending on your lender, the maximum loan amount can range between lower and higher. DSCR allows you to purchase higher ticket-size investment homes on your program if needed.

  • Maximum properties owned - DSCR mortgages don't limit the number of homes you can own. Moreover, they don't limit the number of loans you can take.

  • Income and employment, debt-to-income ratio - Your debt-to-income ratio isn't considered when examining your loan application since the program relies on a coverage ratio to evaluate eligibility - they use your investment property cash flow. Plus, this implies that your lender won't check your income and employment verification when applying for a DSCR loan, which minimizes the paperwork needed.

  • Cash reserves - Many lenders need cash reserves equaling 6 months of payments. However, a lower DSCR may demand more ample funds.

  • Prepayment penalties - Unlike typical loans for investment properties, DSCR loans come with prepayment penalties. That's why it's always wise to go through the terms and conditions of your mortgage to understand all the fees you could have to pay due to early prepayment or refinancing.

  • Closing your mortgage in the name of an LLC - Many DSCR loan lenders in Polk County allow borrowers to close their mortgages in the name of an LLC.

  • Seller-paid closing costs - Most DSCR lenders allow sellers to clear a particular portion of loan closing costs. Talk to your lender to confirm whether this is something they offer.

  • DSCR Mortgage Rates in Polk County - Mortgage rates for DSCR homes are about 1% to 2% higher than interest rates for typical investment homes. For DSCR mortgages, there's typically a broader difference in price, so it's wise to compare quotes from different lenders to get the best rates.

5 Best Cities to Invest in Polk County, Florida

Welcome to Polk County, situated between Orlando and the Tampa metropolitan area, a top contributor to the state's economy. Residents, visitors, and investors alike are drawn to the distinctive character of the county's cultural venues, heritage sites, and breathtaking natural landscapes.

Are the scenic paradise beaches, endless warm weather days, and Polk County's zero state income taxes calling your name?

Whether you're looking for your dream retirement city or want to invest in real estate, we'll help you narrow your list to the 5 best places to invest in Polk County, Florida. Let's dive in!


If you're looking to invest in one of the fastest-growing cities in Polk County, Lakeland should be on top of your list. Aptly named for its 38 great lakes, Lakeland city is infused with natural beauty and Old Florida history. Remnants of the city's past, such as Munn Park and Polk Theater, remind residents of the region's 19th-century roots.

It strikes a perfect balance between resort-style amenities and small-town living. The city is home to state parks and golf courses, while downtown hosts various restaurants and shops.

The median home price in Polk County is $304,274. In addition, its proximity to Orlando and Tampa keeps Polk County's real estate market very competitive. This makes it a perfect loan alternative for the streamlined and faster processing times provided by DSCR loans.


While Davenport might be small, it's a charming city that offers its locals and investors many perks. It's a perfect place to invest in real estate as it's only a few miles from the flourishing Four Corners region - where Osceola, Orange, Polk, and Lake counties meet.

The typical home value of properties in Davenport is about $378,166. As of September 2022, the median listing property price was $405,400, a 21.5% jump from last year. On the other hand, the median listing price per square foot was about $215.


Centrally situated between Tampa and Orlando, Auburndale is a perfect place to work, live, and invest. A quaint, peaceful city just a few hours' drive from entertainment spots and larger towns, Auburndale is among the smallest but most loved cities in Polk County.

The demographics of a city can be a good indicator of how "neighborly" it is. Investors can take advantage of Auburndale's fast-growing rate, with a neighborly feel of 66% and a total population of roughly 16,000.

Another vital indicator of knowing how ideal a place is for investment is by checking the number of investment properties sold in the past. About 90 homes were listed for sale in Auburndale this month, which is 64% higher than last year's.

Haines City

Nestled in the heart of Central Florida, south of Davenport, Haines city has greatly benefited from its proximity to Walt Disney World. Like most Central Florida cities, Haines boasts top-rated outdoor attractions to keep homeowners entertained.

Lake Eva Community Park is among the most well-known entertainment destinations in Polk County, boasting a wide array of athletic facilities, including an aquatic center, basketball courts, community center, pavilions, children's play area, and much more. The park is also home to year-round events and fun activities.

Aside from plenty of attractions, this beautiful city offers investors an excellent opportunity to own affordable rental homes in Haines City. The median selling price of houses in this city is about $340,000.

Winter Haven

Florida is full of small cities that are ideal to invest in. Among these towns, Winter Haven is a widely known region that attracts a broad range of people, from young families to retirees. Undoubtedly, this scenic city's natural resources make it a unique spot. It's nestled between its famous Chain of Lakes, featuring 50 lakes connected by a canal. Most of these lakes boast boat ramps, waterside parks, water-sport rentals, and restaurants for residents to enjoy.

Not only does Winter Haven border unique locations, but it also won't cost locals excessive money to live there. According to Zillow, the average home listing price in Winter Haven is about $296,191. The region's total living costs are 12% lower than the other parts of the country. This means more people are likely to move into Winter Haven due to its low cost of living, making it easy for you to find tenants.

Apply for a DSCR Mortgage Today

Investing in real estate in Polk County is a perfect way of building wealth, but securing a loan for expensive investment properties can be pretty challenging.

With a DSCR loan, you can get the funding to plow money into rental homes without worrying about tax returns, W-2s, and pay stubs.

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