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DSCR Loans in Florida: 2026 Requirements & the Ratio on a Real Brevard Rental

By John Kleopoulos, Mortgage Loan Originator, NMLS #2686219 | Loan Factory, Inc., NMLS #320841 | Last reviewed October 15, 2026

The short answer: A DSCR loan qualifies the property instead of your tax returns: the lender divides the rent by the full monthly payment and wants a ratio of about 1.0 or better, with the best pricing at 1.20 or above. In 2026 that typically means 20–25% down, a 660+ credit score, 3–6 months of reserves, and a rate above conventional. On the Space Coast, the hard part isn’t the requirements — it’s the math. At today’s rates, a typical Brevard single-family rental doesn’t reach 1.0 until 30–40% down. A duplex often gets there at 25%. Here’s the full breakdown with real local rents.

Every national DSCR lender has a “requirements” page. None of them tells you whether a 3-bedroom in Palm Bay actually pencils. That’s the question I get on the phone, so that’s the one this post answers — with the ratio worked out on three real Brevard scenarios, and the levers that move a deal from 0.88 to 1.05.

Key numbers (as of October 15, 2026)

  • Typical 2026 DSCR requirements: minimum ratio 1.00 (some lenders to 0.75, or no ratio, at lower leverage); best pricing at 1.20–1.25; credit 620–660 minimum, 700+ for best pricing; 20–25% down (a few allow 15% at 740+); 3–6 months of PITIA in reserves; minimum loan around $100,000–$150,000. — industry-wide ranges; your lender’s terms govern
  • Brevard County rents (May 2026): 3-bedroom house average $2,160 (median $2,035); 2-bedroom house $1,775; 4-bedroom house $2,524; 2-bedroom apartment $1,741. — Rentometer, Brevard County
  • Brevard median single-family price: $376,018; condos/townhomes $270,000 (August 2026). — Space Coast Association of REALTORS data
  • Conventional 30-year reference rate: 7.40% (Freddie Mac, October 8, 2026). DSCR loans price above this; I use an illustrative 8.00% in the examples below. — Freddie Mac PMMS
  • Non-homestead property taxes in Brevard: no exemption, assessed at purchase price, roughly 1.3–1.5% of value depending on city. I use 1.35% below. — Brevard County Property Appraiser
  • Landlord insurance, Brevard single-family: roughly $2,500–$4,000 a year depending on roof age and distance from the coast. I use $3,000 below. — Citizens and Florida OIR county data

What a DSCR loan is, in one paragraph

DSCR stands for debt service coverage ratio. A DSCR lender doesn’t look at your W-2s, tax returns or debt-to-income ratio. It looks at the property: take the monthly rent, divide it by the full monthly payment — principal, interest, taxes, insurance and HOA dues (PITIA) — and the result is the ratio. Rent of $2,400 against a $2,000 payment is a 1.20 DSCR. Rent of $2,000 against a $2,400 payment is 0.83. Lenders want 1.00 or better; some will go lower at a higher rate and more money down. That’s the whole product. It exists for investors whose tax returns don’t reflect their real income, who own too many properties for conventional limits, or who simply want to close in an LLC without a personal income exam.

2026 DSCR requirements, one by one

  1. The ratio. 1.00 is the standard floor. 1.20–1.25 earns the best rate. A handful of lenders go to 0.75, and a few offer “no-ratio” programs, both at lower leverage (usually 65–70% LTV) and a noticeably higher rate. Which rent number the lender uses matters as much as the ratio itself: most take the lower of your signed lease or the appraiser’s market-rent schedule (Form 1007 for single-family, 1025 for 2–4 units). For vacant properties, it’s the appraiser’s number. For short-term rentals, the rules get complicated — I wrote a separate post on how lenders count Airbnb income in Cocoa Beach.
  2. Down payment. 20–25% on a purchase is standard; 25% is where most lenders’ pricing improves. A few go to 15% with a 740+ score and a strong ratio. On a cash-out refinance, expect a 70–75% LTV cap.
  3. Credit. Minimums run 620–660 depending on the lender. Pricing tiers step up at 680, 700, 720 and 740. Below 680, you’ll pay for it in rate and may need more down.
  4. Reserves. 3–6 months of the full PITIA payment in liquid accounts after closing, per property. Some lenders want more if you own several financed properties.
  5. Property type. Single-family, 2–4 units, warrantable condos and townhomes. Non-warrantable condos and condotels are a case-by-case problem on the barrier island. Rural and unique properties are harder.
  6. Occupancy. Non-owner-occupied, period. DSCR is a business-purpose loan; you sign a certification that you won’t live there. It doesn’t carry the consumer protections of a residential mortgage, and the loan documents say so.
  7. Vesting. Most DSCR lenders allow (and some prefer) closing in an LLC, with a personal guarantee. That’s one of the main reasons investors choose it over conventional, which requires individual vesting.
  8. Prepayment penalty. Common and legal on business-purpose loans in Florida. Typical structures are 1 to 5 years, declining (5-4-3-2-1 or 3-2-1), and you can usually buy the penalty down or off for a higher rate. If you plan to refinance or sell inside three years, this is the term to negotiate.
  9. Minimum loan amount. Usually $100,000–$150,000, which rules out some of the cheapest Titusville and Cocoa inventory.
  10. Experience. Most lenders don’t require landlord experience, but a few require first-time investors to own a primary residence, or price them slightly higher.
  11. Documentation. No tax returns, no W-2s, no pay stubs. You’ll provide the lease (if any), the appraisal with rent schedule, an insurance quote, HOA documents if applicable, asset statements for down payment and reserves, your entity documents if closing in an LLC, and a credit pull.

The Brevard math: three real scenarios

All three use an illustrative 8.00% rate on a 30-year fixed, taxes at 1.35% of purchase price with no exemption, and the rent figures from the May 2026 county data. Your numbers will differ; the pattern won’t.

Scenario 1: 3-bedroom, 2-bath single-family in Palm Bay, $330,000, rent $2,150.

  • 25% down (loan $247,500): P&I about $1,816, taxes $371, insurance $250. PITIA about $2,437. DSCR 0.88. Declined by most lenders, or priced as sub-1.0.
  • 30% down (loan $231,000): P&I about $1,695. PITIA about $2,316. DSCR 0.93. Still short.
  • 40% down (loan $198,000): P&I about $1,453. PITIA about $2,074. DSCR 1.04. Approvable at standard terms.
  • 25% down, interest-only (loan $247,500): IO payment about $1,650. PITIA about $2,271. DSCR 0.95. Closer, not there.

That’s the honest picture of a median-ish Brevard single-family rental at today’s rates: the rent-to-price ratio is about 0.65% a month, and at 8% you need roughly 40% down to clear 1.0 on a fully amortizing loan.

Scenario 2: 3-bedroom single-family in Titusville or west Palm Bay, $280,000, rent $2,000.

  • 25% down (loan $210,000): P&I about $1,541, taxes $315, insurance $250. PITIA about $2,106. DSCR 0.95.
  • 30% down (loan $196,000): P&I about $1,438. PITIA about $2,003. DSCR 1.00. Right at the line.
  • 30% down, interest-only: IO payment about $1,307. PITIA about $1,872. DSCR 1.07. Approvable with room.

Lower price point, nearly the same rent. The rent-to-price ratio moves to about 0.71% and the deal works at 30% down. This is why the DSCR investors I work with buy in Titusville, Cocoa, west Palm Bay and parts of Melbourne, not Viera or the beachside.

Scenario 3: Duplex in Melbourne, $400,000, two 2-bedroom units at $1,750 each ($3,500 gross).

  • 25% down (loan $300,000): P&I about $2,201, taxes $450, insurance $300 (two-unit policy). PITIA about $2,951. DSCR 1.19. Approvable, and nearly at the best-pricing tier.
  • 20% down (loan $320,000): P&I about $2,348. PITIA about $3,098. DSCR 1.13. Still approvable.

Two rents against one tax bill and one roof. Small multifamily is where Brevard DSCR deals pencil at standard leverage, and it’s where I point most first-time DSCR borrowers who ask why their single-family numbers don’t work.

What actually moves the ratio (ranked by how much)

  1. Purchase price relative to rent. Nothing else comes close. A $50,000 price difference on the same rent is worth more than any rate, product or structure. Buy where the rent-to-price ratio is 0.7% or better, which on the Space Coast means the mainland, not the island.
  2. Down payment. Each additional 5% down on a $300,000 purchase cuts the payment by about $110 a month at 8%. From 25% to 40% is the difference between 0.88 and 1.04 in Scenario 1.
  3. Units. A duplex at the same price as a house roughly doubles the numerator. Triplexes and quads do it again. Fewer of them exist in Brevard, which is why they go fast.
  4. Interest-only or 40-year amortization. IO at 8% on $250,000 saves about $165 a month versus 30-year amortizing. Several DSCR lenders offer it, often with a 10-year IO period. It raises the ratio; it does not build equity. Cash-flow tool, not a free lunch.
  5. Insurance. A new roof with wind-mitigation credits versus a 2006 roof can be a $1,500-a-year swing — $125 a month in the denominator. Get the quote before you write the offer, and factor roof age into the price.
  6. Rate. A quarter point on $250,000 is about $43 a month. Real, but the smallest lever on this list. Shopping the lender matters more for the terms — which rent method they use, their minimum ratio, their prepayment penalty structure — than for the rate alone.
  7. Buying the ratio down with seller concessions. Business-purpose loans generally allow seller credits toward closing costs, and a seller-paid rate buydown lowers the payment the ratio is calculated on. Ask; in a 40-day market, Brevard sellers are saying yes.

DSCR vs. conventional for a Brevard rental, in brief

Conventional investment-property loans are cheaper — often by a half point to a point — and have no prepayment penalty. They also require full income documentation, a 45% debt-to-income ratio including the new property (with only 75% of rent counted), individual vesting, and they cap you at ten financed properties. If you have clean W-2 income, few properties and no LLC requirement, conventional usually wins on cost. DSCR wins when your tax returns understate your income, when you’re past the property limit, when you need to close in an entity, or when speed and simplicity are worth the rate. I run both on every investor file where both are possible; about a third of the time, conventional is the better answer and I say so.

From my files: The investor who sticks with me is a contractor with three rentals already, strong cash, and tax returns that show a loss every year because his CPA is good at her job. Conventional declined him on DTI. He bought a Melbourne duplex at 25% down on a DSCR loan, ratio 1.15, closed in his LLC in 24 days, with a 3-year declining prepayment penalty he negotiated down from five. He’s paying about three-quarters of a point more than a conventional rate would have been. He considers that the price of not having to explain his Schedule E to an underwriter, and for him it is.

Frequently asked questions

What DSCR ratio do I need in 2026?
1.00 at most lenders. 1.20–1.25 for the best pricing. Some lenders accept 0.75 or no ratio at lower leverage and a higher rate.

Can I get a DSCR loan with 20% down in Florida?
Yes, with many lenders. But on a Brevard single-family at today’s rates, 20% down rarely produces a 1.0 ratio. Expect 25–40% to make the math work, or buy a 2–4 unit.

Do DSCR lenders use my lease or the appraiser’s rent?
Usually the lower of the two. On a vacant property, the appraiser’s market rent schedule is the number. Bring a signed lease at or above market and it helps; bring one below market and it hurts.

Can I close in an LLC?
Almost always, with a personal guarantee. That’s one of DSCR’s main advantages over conventional. Talk to a Florida attorney about the entity itself; I handle the loan side.

Is there a prepayment penalty?
Usually, for 1 to 5 years, and it’s negotiable. If you plan to sell or refinance soon, buy the penalty period down even if it costs an eighth in rate.

Does Florida insurance really change the ratio that much?
Yes. On a $2,100 rent, the difference between a $2,500 and a $4,000 annual premium is 0.06 in the ratio — enough to move a deal across the 1.0 line in either direction. Quote it first.

Can I use a DSCR loan to refinance a rental I already own?
Yes, rate-and-term or cash-out, typically to 70–75% LTV. Most lenders want 6–12 months of ownership before a cash-out refinance at the new appraised value.

Sources

All ratio examples are for illustration only. They use an illustrative 8.00% interest rate, a 1.35% property tax estimate, insurance estimates, and county-average rents from a third-party source; they are not rates, payments or terms offered by Loan Factory or John Kleopoulos. Actual DSCR rates, requirements and rent methods vary by lender and change frequently, and the rate may change or not be available at commitment or closing. DSCR loans are business-purpose loans for non-owner-occupied investment property, are not subject to the same consumer protections as a residential mortgage, and commonly include prepayment penalties. This is general information, not a loan offer, legal advice, tax advice or investment advice.

Want to know if your Brevard rental pencils before you write the offer?

Send me the address or the listing, the rent (actual or expected), your down payment, and whether you’re closing personally or in an LLC. I’ll run the ratio with real taxes, a real insurance estimate for that roof and that neighborhood, and show you which of my DSCR lenders will take it, at what leverage, with what prepayment terms — shopped across lenders so you see the spread. If conventional is cheaper for your situation, I’ll tell you that too. I work weekends, which is when investors are looking at properties.

Book a call · Start a secure application (opens Loan Factory’s secure borrower portal, a separate site)

John Kleopoulos, NMLS #2686219. Loan Factory, Inc., NMLS #320841. Florida License LO-150890. Equal Housing Opportunity. This article is for educational purposes only and is not a commitment to lend, an offer of credit, or legal, tax or investment advice. Programs, rates, terms and conditions are subject to change without notice and to borrower and property qualification. Not all applicants will qualify. Loan Factory and John Kleopoulos are not affiliated with, endorsed by, or acting on behalf of any government agency. The $2,000 Best Price Guarantee is subject to the terms and conditions at loanfactory.com/best-price-guarantee.

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