DSCR Loans in Miami Metro: Investment Property Financing Guide 2026

South Florida's real estate market has exploded over the past decade, with Miami becoming a magnet for domestic migration, international investment, and remote workers seeking sunshine and no state income tax. The Miami metropolitan area—encompassing Miami-Dade, Broward, and Palm Beach counties—offers some of the most dynamic real estate investment opportunities in the United States.

For investors targeting Miami rental properties, DSCR (Debt Service Coverage Ratio) loans have become essential financing tools. With Miami's unique mix of international buyers, self-employed entrepreneurs, and investors with complex income structures, traditional mortgage qualification often doesn't work. DSCR loans solve this by qualifying you based on rental income, not W-2s.

What Makes Miami's Market Different

No State Income Tax

Florida's zero state income tax attracts high earners from California, New York, and Illinois. This migration supports rental demand and property appreciation. For investors, your rental income isn't subject to state income tax either—improving overall returns.

International Investment Hub

Miami serves as the gateway to Latin America. International buyers from Brazil, Argentina, Venezuela, Colombia, and other countries pour money into Miami real estate. This creates strong demand and supports property values, but also means competition for deals.

Insurance Complexity

Miami's coastal location means hurricane risk and flood zones. Insurance costs can be $3,000-$8,000+ annually, significantly impacting DSCR calculations. Understanding insurance is critical before buying.

Seasonal Rental Markets

Parts of Miami thrive on short-term and seasonal rentals. While these can generate higher income, DSCR lenders typically use long-term rental comps only. Factor this into your strategy.

Condo Dominance

Miami has more condos than any major U.S. metro. DSCR loans for condos come with additional requirements around HOA finances and warrantability. Many Miami condos don't qualify for standard financing.

Understanding DSCR Loans

A DSCR loan qualifies you based on the rental income the property generates rather than your personal income. The lender calculates your DSCR by dividing monthly rent by monthly housing payment.

Formula: DSCR = Monthly Rental Income ÷ Monthly Debt Service
(Debt service includes principal, interest, property taxes, insurance, and HOA fees)

Example Miami Calculation:

Property: $450,000 condo in Brickell
Down payment (25%): $112,500
Loan amount: $337,500
Rate: 8.0%, 30 years
Monthly P&I: $2,477
Property taxes: $375/month ($4,500/year)
Insurance: $250/month
HOA: $600/month
Total monthly debt: $3,702

Market rent: $3,200/month
DSCR: $3,200 ÷ $3,702 = 0.86

This property doesn't meet most lenders' 1.0 minimum DSCR requirement. The HOA fee kills the numbers—a common problem in Miami condos.

Why Miami Investors Use DSCR Loans

International and Non-Traditional Income

Many Miami investors are business owners, real estate professionals, international buyers, or self-employed. Their tax returns don't reflect actual income capacity. DSCR loans eliminate income documentation entirely.

Portfolio Scaling

Conventional loans cap at 10 properties. Miami investors building larger portfolios need DSCR loans to continue financing acquisitions.

Speed in Competitive Markets

Miami moves fast. All-cash offers dominate. DSCR loans close in 2-3 weeks versus 45+ days for conventional, making you more competitive.

Asset-Based Qualification

DSCR loans care about reserves and down payment, not employment history. If you have cash but irregular income, DSCR works.

No Ratio Restrictions

Traditional mortgages limit debt-to-income ratios to 43-50%. With DSCR, your personal DTI doesn't matter. Only the property's income matters.

Best Miami Metro Markets for DSCR Investments

Miami-Dade County

Brickell: Miami's financial district. Median condo prices $500,000-$800,000. High rents ($2,800-$4,500 for 2BR) but also high HOA fees. DSCR can be challenging due to fees.

Wynwood/Edgewater: Rapidly gentrifying. Prices $400,000-$600,000 for condos. Younger demographics, strong rental demand. Watch for oversupply in some buildings.

Kendall/West Kendall: Suburban Miami. Single-family homes $400,000-$600,000. Family-oriented rentals, more stable than urban core. Better DSCR ratios typically.

Doral: Corporate relocations and families. Homes $500,000-$700,000. Strong schools, consistent demand. Good DSCR candidates.

Homestead/Florida City: More affordable at $300,000-$400,000. Higher crime in some areas but improving. Veteran investors only.

Broward County (Fort Lauderdale)

Fort Lauderdale: More affordable than Miami. Condos $300,000-$500,000, homes $450,000-$650,000. Strong vacation rental market (if your exit allows).

Plantation/Sunrise: Suburban markets with good schools. Homes $400,000-$550,000. Families and relocations. Solid DSCR properties.

Hollywood: Beach access at lower price than Miami Beach. Condos $250,000-$450,000. Watch for older buildings with deferred maintenance and special assessments.

Palm Beach County

West Palm Beach: Booming market. Prices $400,000-$600,000 for homes. Corporate relocations, finance professionals. Strong appreciation and rent growth.

Boca Raton/Delray Beach: Higher-end markets. Homes $600,000-$1,000,000+. Affluent renters, seasonal demand. Premium rents support DSCR.

Lake Worth/Boynton Beach: More affordable. Homes $350,000-$500,000. Good rental yields, improving neighborhoods.

DSCR Loan Requirements in Miami

Minimum DSCR Ratio

• 1.25+: Best rates and terms
• 1.0-1.24: Standard programs widely available
• 0.75-0.99: Limited lenders, higher rates (8.5-10%)
• Below 0.75: Very difficult, expect 10%+ rates if available

Down Payment

Single-family homes: 20-25% down
Condos: 25-30% down (higher due to project risk)
Properties over $1M: 25-30% down
Non-warrantable condos: 30-35% down if available

Miami condos often require higher down payments than other markets due to association risks, high investor concentration, and litigation.

Credit Score Requirements

• 740+: Best pricing
• 700-739: Standard rates
• 680-699: Rate increase of 0.25-0.50%
• 660-679: Rate increase of 0.50-1.0%, limited lenders
• Below 660: Very few options

Reserve Requirements

Expect 6-12 months PITI reserves per property. For a Miami property with $4,000/month PITI, you need $24,000-$48,000 in liquid reserves.

Multiple properties: Reserves stack. With 3 properties, you might need $75,000-$150,000 in reserves total.

Miami's high insurance costs mean reserve requirements are higher than many markets.

Property Requirements

Warrantable condos: Must meet Fannie Mae guidelines. HOA over 50% owner-occupied, fewer than 15% delinquencies, proper insurance, no litigation.

Non-warrantable condos: Many Miami condos are non-warrantable due to high investor concentration or litigation. Expect 30% down, higher rates, and fewer lender options.

Short-term rental restrictions: Many HOAs ban Airbnb. DSCR lenders use long-term rental comps. Verify HOA rules before buying.

Miami-Specific Challenges

Insurance Costs

Hurricane insurance is expensive and rising. Coastal properties might pay $5,000-$10,000+ annually. Flood insurance adds another $500-$3,000 depending on zone.

For DSCR calculations: Higher insurance means higher monthly debt service, lowering your DSCR. Always get insurance quotes before making offers.

Citizens Property Insurance: Florida's insurer of last resort. If your property is in Citizens, some lenders won't finance it or will charge rate premiums.

HOA Fees and Special Assessments

Miami condos have high HOA fees—$400-$1,000+ monthly is common. Waterfront buildings can exceed $1,500/month.

Special assessments: Older buildings face deferred maintenance. Seawall repairs, elevator replacements, and 40/50-year recertifications can trigger $50,000+ special assessments per unit.

DSCR lenders review HOA financials. Buildings with underfunded reserves or pending assessments may not qualify.

Foreign National Buyers

Miami attracts international buyers. Many DSCR lenders now offer foreign national programs requiring:

• 30-40% down payment
• Valid passport and visa
• U.S. bank account with 6-12 months reserves
• Higher rates (typically 1-2% premium)

Zoning and Short-Term Rentals

Miami Beach and other municipalities heavily restrict short-term rentals. While you might plan to Airbnb your property, DSCR lenders only consider long-term rental income.

Verify local ordinances and HOA rules. A property that only works as a short-term rental won't qualify for DSCR financing in most cases.

Market Volatility

Miami is cyclical. The 2008 crash hit South Florida hard. While the current market is strong, understand you're investing in a boom-and-bust market. Don't over-leverage.

Current Rate Environment

As of early 2026, Miami DSCR loan rates typically run:

Single-family homes:

• DSCR 1.25+, 740+ credit: 7.5-8.0%
• DSCR 1.0-1.24, 700+ credit: 8.0-8.5%
• DSCR 0.75-0.99: 8.5-9.5%

Warrantable condos: Add 0.25-0.50%

Non-warrantable condos: Add 0.50-1.0%

Foreign nationals: Add 1.0-2.0%

These rates are 1.5-2.5 points above conventional mortgages but come with no income documentation.

Rate Buydowns

Some lenders offer points to buy down rates. Each point (1% of loan amount) typically reduces rate by 0.25%. On a $400,000 loan, paying $4,000 in points might save 0.25% rate.

When it makes sense: If you plan to hold long-term (5+ years) and the property cash flows well, buying down can improve returns.

Sample Deal Analysis

Let's analyze a realistic Miami investment property using DSCR financing:

Property: 3/2 single-family home in Kendall
Purchase price: $525,000
Down payment (25%): $131,250
Loan amount: $393,750
Interest rate: 8.0%
Term: 30 years

Monthly expenses:
Principal & Interest: $2,891
Property taxes ($10,500/year): $875
Insurance ($4,200/year): $350
HOA: $0
Total monthly debt: $4,116

Income:
Market rent: $3,100/month
DSCR: $3,100 ÷ $4,116 = 0.75

Analysis: This property doesn't meet 1.0 DSCR. You could:

1. Increase down payment to 30%: Loan becomes $367,500, P&I drops to $2,698, total debt $3,923, DSCR rises to 0.79—still not enough.

2. Negotiate lower price to $485,000: At 25% down, loan is $363,750, total monthly debt $3,814, DSCR becomes 0.81—closer but still short.

3. Find a property with higher rent: A similar home renting for $3,500 would achieve DSCR of 0.85 with original numbers. Need $3,800/month to hit 0.92.

4. Target a cheaper property: $425,000 property with same rent profile might work better.

Conclusion: This deal doesn't work without significant down payment (35-40%) or a lower purchase price. This is common in Miami—not every property qualifies.

How to Apply for a Miami DSCR Loan

Step 1: Verify Property Type and Location

Before falling in love with a property, verify:

• Is it in a flood zone? (Check FEMA maps)
• Is the condo warrantable? (Ask the listing agent or HOA)
• What's the insurance cost? (Get a quote)
• What are HOA fees and reserves? (Review HOA docs)

Step 2: Calculate DSCR

Use real numbers:

• Actual market rent (pull 5-10 comparable rentals)
• Real property tax (check county records)
• Insurance quote (don't guess)
• Actual HOA fees (get from HOA docs)

Run the calculation before making an offer.

Step 3: Get Pre-Approved

DSCR pre-approval requires:

• Credit authorization
• Bank/asset statements (recent 2 months)
• Property information
• Estimated rental income

Turnaround: 24-48 hours typically.

Step 4: Make Offer

In Miami's market, all-cash offers often win. DSCR loans aren't cash, but short closing times (14-21 days) make you competitive versus conventional buyers (45+ days).

Strategy: Offer slightly above asking with 3-week close rather than below asking with 45-day close. Speed matters to sellers.

Step 5: Appraisal and Rent Schedule

The lender orders:

• Full appraisal
• Rent schedule (Form 1007) showing market rent

Critical: If the rent schedule shows lower rent than you calculated, your DSCR drops. You might not qualify or need to bring more down payment.

Always be conservative with rent estimates. Appraisers often come in 5-10% below Zillow estimates.

Step 6: HOA Review (Condos)

For condos, lenders review:

• HOA budget and financials
• Certificate of insurance
• Master insurance policy
• Articles and bylaws
• Questionnaire (PERS or similar)

Red flags:

• Under 50% owner-occupied
• Over 15% delinquencies
• Pending litigation
• Underfunded reserves (<10% budget)
• Deferred maintenance

Any of these can kill the deal.

Step 7: Insurance

You need:

• Hazard insurance
• Flood insurance (if in FEMA zone)
• Windstorm coverage
• Liability coverage

Get quotes early. Insurance can make or break deals in Miami.

Step 8: Close

Florida closings are handled by title companies (no attorneys required unlike some states). Closings are quick—often 30 minutes. Review your Closing Disclosure 3 days before closing and bring funds via wire.

Common Miami DSCR Mistakes

Underestimating Insurance

Using $1,500 annual insurance estimates when reality is $4,500 destroys your DSCR. Always get real quotes.

Ignoring Flood Zones

FEMA flood zones require flood insurance. Even if the property hasn't flooded in 30 years, you'll pay $1,000-$3,000+ annually. Factor this in.

Buying Non-Warrantable Condos Without Realizing It

You fall in love with a condo, get under contract, then discover it's non-warrantable and requires 30% down. Now you're scrambling or losing your deposit.

Prevention: Ask upfront if the building is Fannie Mae approved or warrantable.

Chasing Appreciation, Ignoring Cash Flow

Miami appreciates rapidly in booms, but also crashes hard. Don't buy negative cash flow properties hoping for appreciation. Target properties that cash flow from day one.

Overlooking Special Assessments

Read HOA minutes and budgets. If the reserve study shows $2 million in deferred maintenance and reserves are $100,000, a special assessment is coming.

Using Airbnb Rents for Calculations

DSCR lenders use long-term rent comps. Your property might rent for $5,000/month on Airbnb, but if long-term comps are $3,000, that's what the lender uses.

DSCR vs. Other Miami Financing Options

DSCR vs. Conventional

Conventional pros:

• Lower rates (1.5-2.5% less)
• Lower down payments possible (15-20%)
• Established guidelines

Conventional cons:

• Full income documentation
• Debt-to-income ratio limits (hard for self-employed)
• 10-property limit
• Longer closing (45+ days)

Best for: W-2 employees with stable income building small portfolios.

DSCR vs. Bank Statement Loans

Bank statement loans qualify you based on 12-24 months of bank deposits rather than tax returns.

Bank statement pros:

• Personal residence or investment property
• Based on deposits (good for business owners)

Bank statement cons:

• Still requires income documentation (statements)
• Debt-to-income applies
• Fewer lenders offer them

Best for: Self-employed buying primary residences.

DSCR vs. Foreign National Loans

If you're a foreign national, dedicated foreign national programs often beat DSCR:

Foreign national pros:

• Designed for international buyers
• Clear documentation requirements
• Established processes

Foreign national cons:

• Higher rates
• Larger down payments (30-40%)
• More scrutiny on source of funds

Some lenders offer DSCR loans to foreign nationals, combining both programs.

DSCR vs. Hard Money

Hard money pros:

• Fast funding (1 week possible)
• Credit doesn't matter much
• Flexible on property condition

Hard money cons:

• Very expensive (10-15% rates)
• Points and fees (3-5 points)
• Short term (6-24 months)

Best for: Fix-and-flip or bridge financing, not buy-and-hold.

Building a Miami Portfolio with DSCR

Start Conservative

Your first Miami DSCR purchase should have a DSCR of 1.2+ and be in a solid neighborhood. Establish your track record.

Diversify Geography

Don't buy 5 condos in the same Brickell building. Spread across Miami-Dade, Broward, and Palm Beach. Different markets behave differently.

Mix Property Types

Combine condos and single-family homes. Condos offer lower maintenance, homes offer more control and potentially better appreciation.

Build Lender Relationships

Once you find a responsive DSCR lender who understands Miami, stick with them. You'll get faster approvals and possibly better pricing on subsequent deals.

Plan for Hurricanes

Miami will get hit eventually. Maintain adequate insurance, keep reserves high, and have contractors lined up for repairs. Hurricane damage can wipe out a year of cash flow.

Consider Property Management

At 3-5 properties, professional management makes sense. Cost is 8-10% of rent but provides local expertise, tenant screening, and maintenance coordination—critical if you're not local.

Miami Market Outlook

Positive factors:

• Continued migration from high-tax states
• No state income tax attracting businesses and high earners
• International investment flows (particularly Latin America)
• Remote work enabling lifestyle migration
• Infrastructure improvements (Brightline, transit expansions)
• Strong job growth in finance, tech, healthcare

Risk factors:

• Climate change and rising sea levels
• Insurance costs escalating
• Hurricane risk
• Affordability challenges for workforce
• Cyclical market history (boom/bust)
• Overbuilding in some condo markets

Investment strategy: Focus on inland properties (lower insurance), areas with job growth, and markets serving middle-class renters rather than luxury. Avoid over-leveraging in anticipation of appreciation.

Conclusion

Miami offers extraordinary opportunities for real estate investors willing to navigate its unique challenges. DSCR loans unlock financing for self-employed professionals, international buyers, and portfolio investors who can't qualify conventionally.

Success requires understanding Miami-specific issues: insurance costs, HOA complexities, condo warrantability, and market cyclicality. Not every property makes sense as a DSCR investment—many won't achieve 1.0 DSCR ratios due to high costs.

Run conservative numbers, verify all expenses before making offers, and work with lenders experienced in Florida properties. Target DSCR ratios of 1.2+ for safety margin, maintain substantial reserves for hurricanes and vacancies, and diversify across neighborhoods and property types.

With Miami's strong fundamentals—no state income tax, international appeal, job growth, and lifestyle advantages—investors who buy right can build profitable portfolios using DSCR financing. Just remember: in Miami, underwriting conservatively isn't optional. It's survival.