San Antonio DSCR Loans: Investment Property Financing [2026 Guide]

San Antonio is one of the most attractive investment property markets in Texas, offering a combination of affordability, military-driven rental demand, and population growth that few metros can match. The city added 24,000 new residents between 2023 and 2024, making it the fourth-fastest growing city in the nation by raw numbers. With a median home price around $297,000, average rents pushing toward $1,700 per month, and gross rental yields between 6% and 8% in top submarkets, the math works for investors who structure their financing correctly.

DSCR loans in San Antonio let you qualify based entirely on the property's rental income rather than your personal earnings. No W-2s. No tax returns. No employment verification. If the rental income covers the mortgage payment, you can get approved. For investors building portfolios across Alamo Heights, Stone Oak, Southtown, Helotes, and the booming I-35 corridor stretching toward New Braunfels, DSCR loans eliminate the income documentation requirements that hold back investors who write off legitimate business expenses on their taxes.

What Is a DSCR Loan and Why Does It Work in San Antonio?

A DSCR (Debt Service Coverage Ratio) loan is a financing product built specifically for real estate investors. Instead of evaluating your personal income, the lender examines whether the property generates enough rental income to cover the monthly mortgage payment. The calculation is straightforward:

DSCR = Gross Monthly Rental Income / Total Monthly Debt Service (Principal + Interest + Taxes + Insurance)

A DSCR of 1.0 means the property breaks even. A DSCR of 1.25 means the property generates 25% more income than the mortgage costs. Most DSCR lenders require a minimum ratio between 1.0 and 1.25, though some programs accept ratios as low as 0.75 for borrowers with strong credit in appreciating markets.

San Antonio is particularly well suited for DSCR financing because of its favorable price-to-rent ratio. Consider a single-family rental near Joint Base San Antonio purchased for $260,000. If it rents for $1,650 per month and your total debt service (at 75% LTV with a 7% rate, plus taxes and insurance) comes to $1,380, your DSCR is 1.20. You qualify without showing a single pay stub.

Compare that to Austin, where the median home price exceeds $545,000 but rents are only modestly higher. San Antonio's affordability gives investors a built-in DSCR advantage. Properties that would produce a 0.90 DSCR in Austin can hit 1.25 or higher in San Antonio, opening the door to better rates and terms.

Who Qualifies for a DSCR Loan in San Antonio?

DSCR loans are designed for real estate investors, not owner-occupants. You cannot use a DSCR loan for your primary residence. Beyond that, the qualification requirements are significantly more flexible than conventional mortgages:

• Credit Score: Most lenders require a minimum FICO of 660. Scores of 720 and above unlock the best rates and highest LTV options.
• Down Payment: Expect 20-25% down. Borrowers with 740+ credit scores and a DSCR above 1.25 may access 80% LTV programs.
• Property Types: Single-family homes, duplexes, triplexes, fourplexes, condos, townhomes, and small multifamily buildings (up to 8-10 units with some lenders).
• Loan Amounts: San Antonio DSCR loans typically range from $100,000 to $2 million, with some programs going higher for experienced investors.
• No Income Documentation: No W-2s, tax returns, pay stubs, or employment verification required. The property's income is the sole qualification factor.
• Entity Borrowing: Most DSCR lenders allow you to close in an LLC, LP, or corporation name, which is standard practice for Texas real estate investors.
• Reserves: Expect to show 6-12 months of mortgage payments in liquid reserves (checking, savings, or investment accounts).

Military families stationed at Joint Base San Antonio who want to keep properties as rentals upon PCS orders, self-employed business owners, healthcare professionals at the South Texas Medical Center, and out-of-state investors drawn to San Antonio's affordability all find DSCR loans particularly valuable. If your tax returns show modest income because you write off legitimate business expenses, conventional lenders will turn you away. DSCR lenders do not care.

What Are Current DSCR Loan Rates in San Antonio for 2026?

As of early 2026, DSCR loan rates in San Antonio and across Texas generally range from 6.0% to 8.0%, depending on borrower profile and deal structure. This represents a meaningful improvement from mid-2024, when rates sat in the 7.5-9.0% range. The average rate for well-qualified Texas DSCR borrowers has trended toward 6.5-7.5%.

Five factors determine where your rate lands:

1. Credit Score: Borrowers with 760+ scores access rates 0.5-1.0% lower than those at the 660 minimum.
2. DSCR Ratio: Properties with a DSCR above 1.25 qualify for better pricing. A 1.50 DSCR can unlock the best available rates.
3. LTV Ratio: 70% LTV gets better pricing than 80% LTV. Each 5% reduction in leverage typically shaves 0.125-0.25% off your rate.
4. Loan Amount: Loans above $250,000 often receive better pricing due to lender economics. San Antonio's median prices put most investment properties in this range.
5. Property Type: Single-family homes get the best rates. Multi-unit properties and condos carry slight premiums of 0.125-0.50%.

For a typical San Antonio investment property purchase at 75% LTV with a 720 credit score and 1.20 DSCR, expect rates between 6.5% and 7.25%. Use our DSCR calculator to run the numbers on your specific deal.

How Does San Antonio's Military Presence Drive Rental Demand?

San Antonio is Military City, USA, and that designation translates directly into rental property performance. Joint Base San Antonio (JBSA) is the largest joint base in the Department of Defense, encompassing Lackland AFB, Fort Sam Houston, and Randolph AFB. The military and defense sector employs over 89,000 active-duty personnel, civilians, and contractors across the metro, making it one of the single largest economic engines in the region.

For DSCR investors, military housing demand creates several distinct advantages:

Predictable Tenant Income: Military tenants receive Basic Allowance for Housing (BAH) that is paid regardless of economic conditions. In 2025, San Antonio BAH rates ranged from $1,404 per month for an E-1 without dependents to $2,334 for an O-5 with dependents. This guaranteed income source makes military tenants among the most reliable renters in any market.

Constant Turnover Creates Demand: PCS (Permanent Change of Station) cycles bring thousands of new service members to San Antonio every year. Many prefer renting over buying due to the uncertainty of their next assignment. This creates a perpetual cycle of tenant demand that is independent of broader economic conditions.

Off-Base Housing Preference: Base housing has limited capacity and wait lists can stretch months. Many military families choose off-base rentals in neighborhoods like Converse, Live Oak, Universal City, and Schertz near Randolph, or Helotes and Leon Valley near Lackland. Properties within a 15-minute drive of any JBSA installation enjoy strong and consistent occupancy.

Defense Contractor Pipeline: Beyond active duty, major defense contractors including Booz Allen Hamilton, SAIC, and Lockheed Martin maintain significant San Antonio operations. Cybersecurity has become a major growth area, with the NSA operating a complex at UTSA's National Security Collaboration Center. These well-paid contractors need housing and frequently rent.

Which San Antonio Neighborhoods Offer the Best DSCR Profiles?

San Antonio's diverse neighborhoods create a range of DSCR investment opportunities. The best areas for DSCR investors balance reasonable acquisition costs with strong and consistent rental demand.

High Cash Flow Potential (DSCR 1.25+)

• Converse/Universal City: Near Randolph AFB with median prices of $220,000-$290,000 and rents of $1,400-$1,700. Military tenant demand keeps vacancy rates extremely low. Affordable entry points produce strong DSCRs.
• Southtown/King William: Walkable, cultural district south of downtown with prices of $250,000-$380,000 and rents of $1,500-$2,000. Young professionals and creatives drive rental demand. Rapid appreciation adds equity upside.
• West San Antonio/Marbach: Median prices of $180,000-$250,000 with rents of $1,200-$1,500. Near Lackland AFB, this area serves military families and working-class tenants with reliable demand and excellent rent-to-price ratios.

Moderate Cash Flow (DSCR 1.0-1.25)

• Monte Vista/Tobin Hill: Historic neighborhoods near the Pearl District with prices of $350,000-$500,000 and rents of $1,800-$2,500. Premium rents but higher entry costs. Best for investors seeking appreciation alongside income.
• Alamo Heights: Upscale enclave with top-rated schools. Median around $400,000 with rents of $2,000-$2,800. Family demand keeps occupancy tight, but higher prices compress the DSCR.
• Stone Oak: Master-planned community in far north San Antonio. Prices of $375,000-$520,000 with rents of $2,000-$2,800. Gated communities, excellent schools, and access to medical employers along the 281 corridor.

Suburban/Exurban Value Plays (DSCR 1.15+)

• New Braunfels: Growing I-35 corridor city with prices of $275,000-$375,000 and rents of $1,600-$2,100. Population growth exceeding 5% annually. Tourism from Schlitterbahn and the Comal River adds short-term rental potential.
• Helotes/Far West Side: Suburban growth corridor near Lackland with prices of $280,000-$380,000 and rents of $1,600-$2,100. New construction and master-planned communities attract families.
• Boerne: Hill Country town 30 minutes northwest with prices of $320,000-$420,000 and rents of $1,700-$2,200. Affluent tenant base and limited rental supply create premium demand.

How Does San Antonio Compare to Austin for DSCR Investing?

San Antonio and Austin sit just 80 miles apart on the I-35 corridor, but they offer dramatically different investment profiles for DSCR borrowers.

Price Advantage: San Antonio's median home price of $297,000 is roughly 40-45% lower than Austin's $545,000. This pricing gap means San Antonio investors need significantly less capital to enter the market and achieve healthy DSCR ratios.

Rent-to-Price Ratio: San Antonio's gross rental yields of 6-8% outperform Austin's 4-5.5%. While Austin commands slightly higher rents (averaging $1,435 versus San Antonio's $1,200-$1,700 depending on property type), the savings on purchase price more than compensate. A property that achieves a 1.25 DSCR in San Antonio would likely sit at 0.85-0.95 in Austin at comparable leverage.

Cost of Living: San Antonio's overall cost of living runs approximately 8% below Austin and 9% below the national average. Housing costs are 21% below national norms. This affordability attracts tenants who might be priced out of Austin, creating a steady flow of renters migrating down the I-35 corridor.

Job Growth Momentum: While Austin leads in tech employment, San Antonio's job growth rate of 2.0% has actually outpaced Austin's 1.4% recently. San Antonio added 23,900 jobs over the past year compared to Austin's 18,900, and the city is projected to add 34,000 jobs in 2025. The economy is diversified across military, healthcare, cybersecurity, manufacturing, and logistics, providing stability that Austin's tech-heavy economy cannot always match.

Property Tax Consideration: Both cities face Texas's high property tax rates (1.8-2.4%), but the impact on DSCR is proportional to property value. On a $297,000 San Antonio property at 2.1%, annual taxes are $6,237. On a $545,000 Austin property at the same rate, taxes are $11,445. That is $434 more per month in debt service before you even factor in the higher mortgage payment.

For DSCR investors, San Antonio offers better entry points, stronger cash flow, and more accessible qualification thresholds. Austin may deliver higher appreciation in a bull market, but San Antonio delivers more consistent income from day one.

How Do You Apply for a DSCR Loan in San Antonio?

The DSCR loan application process is faster and simpler than conventional mortgage lending. Here is the typical timeline from start to finish:

Step 1: Identify Your Target Property Find an investment property in San Antonio. Estimate the monthly rental income using comparable listings on Zillow, Apartments.com, or local property management data. This initial estimate helps determine if the deal pencils out before you commit time and capital.

Step 2: Get Pre-Qualified Contact a DSCR lender and provide the property address, estimated purchase price, expected rent, and your credit score range. The lender runs a preliminary DSCR calculation within hours. No income documents needed at this stage.

Step 3: Submit Your Application The formal application requires minimal documentation: government-issued ID, entity documents (if closing in an LLC), bank statements showing reserve funds, and a property insurance quote. The lender pulls your credit report.

Step 4: Appraisal and Rent Survey The lender orders an appraisal with a rental survey (Form 1007 for single-family, Form 1025 for multi-unit). The appraiser determines market value and estimated market rent. The lender uses the appraiser's rent figure for the official DSCR calculation.

Step 5: Underwriting and Approval Underwriting focuses on three things: the property's income potential, your credit profile, and the LTV ratio. No income verification, no debt-to-income calculations. Typical underwriting takes 1-2 weeks.

Step 6: Closing Close on the property and fund the loan. Total timeline from application to closing is typically 21-30 days. Some lenders can close in as few as 14 days for clean deals.

What Makes San Antonio's Rental Market So Strong for Investors?

San Antonio's rental market fundamentals create a favorable environment for DSCR qualification. Here is what the data shows heading into 2026:

Rent Growth Trajectory: Average rents in San Antonio have been climbing steadily, with forecasts calling for 4-6% rent growth in 2026. Current average rents range from $1,200 for apartments to $1,700+ for single-family rentals depending on neighborhood and property type. For DSCR purposes, single-family rents in the $1,400-$2,200 range across most investment-grade submarkets provide solid income relative to purchase prices.

Tightening Supply: San Antonio experienced an 80% drop in apartment starts in 2024, with only 1,874 units breaking ground compared to 9,526 units in 2023. This was the lowest annual total since 2009. As the current construction pipeline delivers and new starts remain depressed, vacancy rates are projected to decline from 7.2% toward 6.5% through 2026. Tighter supply means stronger tenant retention and upward rent pressure.

Population Inflow: The metro area is projected to add 80,000 new households by 2026, largely driven by in-migration from higher-cost markets. Workers relocating from Austin, California, and the Northeast are choosing San Antonio for its affordability and quality of life. Many of these newcomers rent before buying, feeding the tenant pipeline.

Economic Diversification: San Antonio's economy spans military and defense, healthcare (the South Texas Medical Center employs over 220,000 people), cybersecurity, manufacturing (Toyota's truck plant), tourism (the Alamo, River Walk, and convention center draw 36+ million visitors annually), and financial services (USAA headquarters). This diversification means no single industry downturn can collapse rental demand.

Affordability Gap Sustains Renters: With mortgage rates around 6-7% and the median home price at $297,000, monthly homeownership costs (including Texas's high property taxes) exceed $2,000 for many buyers. Renting at $1,400-$1,700 remains the more practical option for a large segment of the workforce, sustaining tenant demand.

What Are Common Mistakes San Antonio DSCR Investors Should Avoid?

DSCR loans are straightforward, but San Antonio-specific factors trip up investors who are not prepared:

Underestimating Property Taxes: Texas property taxes range from 1.8% to 2.4% of assessed value in the San Antonio metro. On a $300,000 property at a 2.1% rate, that adds $525 per month to your debt service. Investors who estimate taxes based on national averages (around 1.1%) find their DSCR falling below the minimum threshold.

Ignoring Military Tenant Turnover Costs: Military tenants are reliable payers but relocate every 2-3 years. Budget for turnover costs including cleaning, minor repairs, and potential vacancy between tenants. A property near Randolph AFB with strong demand may still sit vacant for 2-3 weeks during tenant transitions.

Overestimating Rents Near New Construction: San Antonio's new apartment supply in certain corridors (particularly the far north side and I-10 West) has created competition. If your target property competes directly with brand-new communities offering move-in specials, your achievable rent may be lower than older comparables suggest.

Skipping the Reserve Requirement: DSCR lenders require 6-12 months of reserves. For a San Antonio property with a $1,500 monthly payment, that means $9,000 to $18,000 in liquid funds. Investors who tie up all their capital in the down payment find themselves unable to close.

Not Factoring HOA Costs: Many San Antonio master-planned communities (Stone Oak, Alamo Ranch, Cibolo Canyons) carry HOA fees of $150-$400 per month. This is included in the debt service calculation and can push a marginal deal below the DSCR threshold. Always confirm HOA costs before running your numbers.

Use our commercial mortgage calculator to model the full picture including taxes, insurance, and HOA fees before committing to a deal.

Can You Use a DSCR Loan for San Antonio Multifamily Properties?

Yes. DSCR loans work well for San Antonio multifamily investments, and the city's multifamily market is entering an attractive phase for buyers.

San Antonio's multifamily vacancy rate has been elevated due to a wave of new construction, but conditions are improving rapidly. With apartment starts down 80% from their 2023 peak, the supply pipeline is drying up. Analysts project vacancy rates will tighten to around 6.5% by late 2026, with rents projected to grow 4-6%. For patient investors, this is a window to acquire multifamily properties at more favorable prices before conditions tighten further.

For DSCR qualification on multifamily properties, lenders evaluate the building's net operating income against the total debt service. A well-located fourplex near Fort Sam Houston purchased for $480,000 with total monthly rents of $5,200 and debt service of $4,000 produces a DSCR of 1.30. That is a strong qualification profile.

Key considerations for San Antonio multifamily DSCR deals:

• 2-4 Unit Properties: Qualify similarly to single-family DSCR loans. Use Form 1025 for the appraisal.
• 5-8 Unit Properties: Some DSCR lenders serve this niche. Expect slightly higher rates (0.25-0.50% premium) and lower maximum LTV (75%).
• Value-Add Strategy: Purchase a multifamily property below market value, renovate units, raise rents to market rate, then refinance with a DSCR loan at the improved income level. A bridge loan can fund the initial acquisition and renovation before you convert to permanent DSCR financing.

The combination of San Antonio's affordable per-unit prices, military-driven tenant demand, and tightening supply conditions makes multifamily DSCR investing one of the strongest plays in the current Texas market.

What Is the San Antonio DSCR Loan Outlook for 2026 and Beyond?

The San Antonio DSCR loan market is positioned for continued growth through 2026 and beyond. Several converging factors make this a compelling entry window:

Declining Rate Environment: DSCR loan rates have already fallen from the 8-9% range in mid-2024 to the 6-7.5% range in early 2026. Further rate compression is expected as the year progresses. Lower rates mean lower debt service, which translates to higher DSCRs and easier qualification on more properties.

Job Creation Momentum: San Antonio is projected to add 34,000 new jobs in 2025, leading the state of Texas in job growth. The unemployment rate sits at just 3.7%. More jobs mean more renters, which supports rent levels and occupancy rates across the metro.

Supply Correction: The dramatic 80% decline in new apartment starts means the current oversupply will be absorbed without significant new competition entering the market. By late 2026, tighter conditions should translate into measurable rent growth and lower vacancy. Properties acquired today at reasonable DSCR ratios could see those ratios improve meaningfully over the next 12-18 months.

Infrastructure Investment: San Antonio is investing heavily in transportation and infrastructure, including the I-35 expansion connecting the city more efficiently to Austin and the broader Texas Triangle. Improved connectivity is expected to drive further population growth and economic development along the corridor.

Institutional DSCR Market Growth: Non-QM securitization volume hit record highs in 2025, with DSCR loans comprising roughly 30% of that volume. This institutional demand is driving competition among lenders and improving terms for individual borrowers. More lenders competing for San Antonio business means better rates, lower fees, and more flexible programs.

The combination of improving rates, strong population growth, military economic stability, and cooling supply creates one of the best entry windows for San Antonio DSCR investors in recent memory.

Contact our lending team to discuss DSCR loan scenarios for your San Antonio investment property.

Frequently Asked Questions About San Antonio DSCR Loans

What is the minimum DSCR ratio required for a San Antonio investment property loan?

Most DSCR lenders serving the San Antonio market require a minimum ratio of 1.0, meaning the property's rental income must at least equal the total monthly debt service. Some lenders offer programs with ratios as low as 0.75 for borrowers with strong credit scores (720+) and larger down payments (25-30%). For the best rates and terms, aim for a DSCR of 1.25 or higher. San Antonio's favorable price-to-rent ratios make achieving a 1.25 DSCR more accessible than in many other major metros, particularly compared to nearby Austin.

Can military service members use DSCR loans for San Antonio rental properties?

Yes. Active-duty military stationed at Joint Base San Antonio frequently use DSCR loans to purchase investment properties they plan to rent out during or after their service. Since DSCR loans do not require income verification, the application process works regardless of your duty status or deployment schedule. Many service members buy properties near Lackland, Fort Sam Houston, or Randolph AFB, rent them to incoming military families using BAH payments, and keep the properties as income-producing assets when they PCS to a new duty station.

How do San Antonio's property taxes affect my DSCR calculation?

Texas property taxes are a significant factor. The effective rate in Bexar County and surrounding counties ranges from 1.8% to 2.4% of assessed value. For a $297,000 property at a 2.1% rate, annual taxes are $6,237, or about $520 per month added to your debt service. This is roughly double the national average and can make the difference between qualifying and falling short. Always use the actual tax rate for your specific property location. Use our DSCR calculator to model the impact.

Is San Antonio better than Austin for DSCR loan qualification?

For most investors, yes. San Antonio's median home price is roughly 40-45% lower than Austin's, while rents are only modestly lower. This creates significantly better price-to-rent ratios and makes it far easier to achieve the 1.0-1.25 DSCR thresholds that lenders require. A property that produces a 1.25 DSCR in San Antonio might only hit 0.85-0.95 in Austin at the same leverage. San Antonio also benefits from a more diversified economy and the military housing demand that Austin lacks.

Can I do a cash-out refinance with a DSCR loan on my San Antonio rental property?

Yes. DSCR cash-out refinancing is one of the most popular strategies for San Antonio investors. If you own a rental property with equity from appreciation, paying down the mortgage, or purchasing below market value, you can refinance into a DSCR loan and pull cash out up to 70-75% of the appraised value. This capital can fund down payments on additional properties, allowing you to scale your portfolio using equity trapped in existing investments. The property must meet the minimum DSCR threshold based on current rents and the new loan amount.

What areas near military bases offer the best returns for DSCR investors?

Properties within a 15-minute drive of JBSA installations tend to perform well. Near Randolph AFB, look at Converse, Universal City, and Schertz where median prices of $220,000-$290,000 and rents of $1,400-$1,700 produce DSCRs of 1.25 or higher. Near Lackland AFB, the Marbach/West Side area offers entry points of $180,000-$250,000 with rents of $1,200-$1,500 for even stronger ratios. Near Fort Sam Houston, Terrell Hills and the Northeast Side offer mid-range options with solid military tenant demand.

Contact Clear House Lending today to discuss DSCR loan options for your San Antonio investment property. Our team helps Texas investors navigate property tax considerations, military housing demand dynamics, and deal structuring to maximize cash flow and portfolio growth.