DSCR Loans in Virginia Beach, VA: How to Finance Rental Properties in Hampton Roads

Virginia Beach sits at the heart of the Hampton Roads metro — the largest military concentration in the world, with Naval Station Norfolk, Joint Expeditionary Base Little Creek, NAS Oceana, and a dozen other installations within a 30-mile radius. Add in a strong tourism economy, multiple universities, and a growing healthcare and tech sector, and you've got a rental market with deep, diversified demand.

DSCR loans let investors finance properties here based on the property's rental income rather than personal income. No tax returns, no pay stubs, no employer verification. Here's how to use them effectively in Virginia Beach and the broader Hampton Roads market.

How DSCR Loans Work

The Debt Service Coverage Ratio measures whether a rental property's income covers its mortgage payment:

DSCR = Gross Monthly Rent ÷ Monthly PITIA

PITIA = Principal + Interest + Taxes + Insurance + Association dues.

• DSCR 1.25+ = strong; best rates and terms
• DSCR 1.0 = rent covers the payment exactly
• DSCR below 1.0 = rent doesn't fully cover the payment (some lenders still approve with larger down payments)

Virginia Beach's Investor Advantages

Several factors make Virginia Beach work for DSCR investors:

• Military BAH: Basic Allowance for Housing provides reliable, government-backed rental income. BAH for an E-5 with dependents in Virginia Beach is approximately $2,064/month (2026). An O-3 with dependents gets about $2,400/month.
• Tourism: Over 13 million visitors annually, supporting a strong short-term rental market along the oceanfront and resort areas.
• Economic diversity: Beyond military, Hampton Roads has the Port of Virginia, Sentara Healthcare, Huntington Ingalls shipbuilding, and a growing tech corridor.
• No state income tax on military pay for active-duty stationed elsewhere — though this affects the tenant, not the investor directly, it makes Virginia Beach attractive to military families.

Virginia Beach Rental Market Numbers

• Median home price: $350,000–$385,000
• Median rent (single-family): $1,900–$2,200/month
• Median rent (3BR apartment): $1,600–$1,800/month
• Property tax rate: 0.89% (Virginia Beach city rate)
• Vacancy rate: 4–6%
• STR nightly rate (oceanfront): $200–$400/night (peak season), $100–$175/night (off-season)
• BAH rates: E-5 w/dependents ~$2,064/month; O-3 w/dependents ~$2,400/month

Virginia Beach's property tax rate is moderate — lower than the national average but higher than some Sun Belt markets. The city assesses properties at 100% of fair market value.

DSCR Calculation: Virginia Beach Example

Property: 4BR/2.5BA in the Great Neck area
Purchase price: $375,000
Down payment: 25% ($93,750)
Loan amount: $281,250
Interest rate: 7.5% (30-year fixed)
Monthly P&I: $1,967
Property taxes: $278/month ($3,338/year)
Insurance: $155/month
Total PITIA: $2,400/month

Market rent: $2,200/month

DSCR = $2,200 ÷ $2,400 = 0.92

At this price point, a single-family home doesn't quite hit 1.0. Let's look at a more investor-friendly scenario:

Property: 3BR/2BA in Kempsville
Purchase price: $320,000
Down payment: 25% ($80,000)
Loan amount: $240,000
Interest rate: 7.5%
Monthly P&I: $1,678
Property taxes: $237/month
Insurance: $140/month
Total PITIA: $2,055/month

Market rent: $2,000/month

DSCR = $2,000 ÷ $2,055 = 0.97

Close. With 30% down, the loan drops to $224,000, PITIA drops to $1,943, and DSCR becomes 1.03. Or find a property with slightly higher rent potential — $2,100/month gets you to 1.02 at 25% down.

The tighter math in Virginia Beach pushes investors toward specific neighborhoods and strategies.

Best Virginia Beach Neighborhoods for DSCR Investments

1. Kempsville

Kempsville is Virginia Beach's largest and most centrally located neighborhood. It's a bedroom community for military families, healthcare workers, and government employees. Schools are solid, commutes are reasonable to multiple bases, and the housing stock is a mix of 1970s–2000s construction.

• Typical purchase price: $300,000–$375,000
• Typical rent: $1,900–$2,200/month
• Investor angle: Military families love Kempsville for its schools and proximity to NAS Oceana and Little Creek. BAH covers rent comfortably. Target updated 3–4BR homes in the $310,000–$340,000 range for the best DSCR ratios.

2. Green Run / Pembroke

Green Run and the Pembroke area (near Town Center) offer affordable entry points with easy access to Virginia Beach Town Center — the city's urban core with offices, restaurants, and retail.

• Typical purchase price: $275,000–$340,000
• Typical rent: $1,700–$2,000/month
• Investor angle: Lower price points improve DSCR math. A $290,000 home renting at $1,850/month with 25% down produces a DSCR around 1.05. Townhomes in this area are even more affordable ($240,000–$290,000) but factor in HOA dues.

3. Oceanfront / Resort Area (STR Focus)

The Virginia Beach oceanfront is a prime short-term rental market from May through September. Nightly rates during peak season can hit $300–$500 for well-located condos and cottages.

• Typical purchase price: $350,000–$600,000+ (condos: $250,000–$400,000)
• Projected STR income: $3,000–$5,500/month (annual average after platform fees)
• Investor angle: DSCR lenders that accept STR income will typically use projected income from AirDNA or similar services at 75%. On a $350,000 condo averaging $3,500/month in STR income, with PITIA of $2,400, the DSCR is 1.46. The catch: condos have HOA dues ($200–$500/month) that are included in PITIA.

4. Chesapeake (Adjacent City)

Chesapeake is part of Hampton Roads and borders Virginia Beach to the west and south. It offers lower prices, larger lots, and a growing suburban feel. Many military families live in Chesapeake and commute to Virginia Beach bases.

• Typical purchase price: $300,000–$380,000
• Typical rent: $1,800–$2,200/month
• Investor angle: Slightly lower property taxes (0.85%) and home prices than Virginia Beach proper. The Deep Creek and Great Bridge areas are popular with families. DSCR ratios are comparable to Kempsville but with a slightly better cost basis.

5. Norfolk (Adjacent City — Military Focus)

Norfolk is home to Naval Station Norfolk, the world's largest naval base. The city has lower home prices than Virginia Beach, creating better rent-to-price ratios. Neighborhoods like Ghent, Larchmont, and East Beach attract both military and civilian renters.

• Typical purchase price: $250,000–$350,000
• Typical rent: $1,600–$2,000/month
• Investor angle: Better DSCR math due to lower prices. A $280,000 home in Norfolk renting at $1,800/month with 25% down produces a DSCR of about 1.05. Norfolk also has more multifamily inventory (duplexes, triplexes) than Virginia Beach.

Property Types for Hampton Roads DSCR Investors

Single-Family Homes

The core of the military rental market. Service members with families want 3–4BR homes with yards in good school districts. Target properties in the $290,000–$370,000 range. The sweet spot is homes that rent at or near BAH rates for E-5 to O-3 ranks ($2,000–$2,400/month).

Duplexes and Multifamily

Harder to find in Virginia Beach's suburban landscape, but Norfolk and older parts of Chesapeake have small multifamily options. A duplex with two $1,400 units ($2,800/month combined) against a single mortgage produces strong DSCR numbers. Check Norfolk's Ghent and Colonial Place neighborhoods for duplexes.

Oceanfront Condos (STR)

Virginia Beach's oceanfront condos are purpose-built for vacation rentals. Many buildings have established rental programs. DSCR lenders will finance these if you can show projected STR income. Watch the HOA dues — they can run $300–$500/month and significantly impact your DSCR.

Townhomes

Virginia Beach has a large townhome inventory, especially in Kempsville and Green Run. Prices are $50,000–$100,000 below comparable SFH properties. HOA dues typically run $100–$250/month. Run the numbers — sometimes the lower purchase price offsets the HOA impact on DSCR.

Virginia Beach DSCR Investment Strategies

Strategy 1: Kempsville Military Family Rental

Buy a 4BR/2.5BA in Kempsville for $340,000. Rent to a military family at $2,100/month (within BAH for an E-6 or O-2 with dependents). PITIA at 25% down: ~$2,100. DSCR: 1.0. Breakeven on paper, but your tenant has government-guaranteed income and typically keeps the property in good condition. This is an equity-building play with minimal cash-flow risk.

Strategy 2: Oceanfront STR Cash Flow

Buy an oceanfront 2BR condo for $320,000. HOA: $350/month. Projected STR income: $3,200/month (annual average). PITIA at 25% down (including HOA): $2,280. DSCR: 1.40. Strong cash flow during peak season (June–August can generate $4,000–$6,000/month), with slower winter months. Budget for STR management (20–25%) and furnishing costs ($15,000–$20,000).

Strategy 3: Norfolk Value Play

Buy a 3BR/2BA in Norfolk's Larchmont neighborhood for $290,000. Rent at $1,850/month. PITIA at 25% down: ~$1,840. DSCR: 1.01. Tightest possible qualification, but Norfolk's lower prices and proximity to the naval base mean consistent demand. Look for properties that can rent at $1,900+ to give yourself margin.

Strategy 4: Chesapeake Family Home

Buy a 4BR in Chesapeake's Great Bridge area for $360,000. Rent at $2,200/month. PITIA at 25% down: ~$2,310. DSCR: 0.95. Need 30% down to hit 1.0+ — PITIA drops to $2,180, DSCR: 1.01. Great Bridge has excellent schools and attracts long-term tenants.

Strategy 5: Norfolk Duplex

Buy a duplex in Norfolk's Ghent area for $400,000. Each unit rents at $1,400/month ($2,800 total). PITIA at 25% down: ~$2,440. DSCR: 1.15. Strong ratio that qualifies with most lenders. Ghent is one of Norfolk's most desirable neighborhoods — walkable, near downtown, and popular with young professionals and military officers.

DSCR Loan Requirements

• Minimum DSCR: 1.0–1.25 (sub-1.0 available with compensating factors)
• Down payment: 20–25% standard; 30% for lower DSCRs
• Credit score: 660+ minimum; 720+ for best rates
• Eligible properties: SFH, 2–4 unit, condo (warrantable), townhome
• Loan range: $100,000–$2,000,000+
• No personal income documentation
• Appraisal with rental survey required
• Reserves: 6–12 months PITIA
• Flood insurance may be required for properties in flood zones (common in Hampton Roads)

Frequently Asked Questions

How does flood insurance affect DSCR in Virginia Beach?

Parts of Virginia Beach — especially near the oceanfront, Lynnhaven, and low-lying areas — are in FEMA flood zones. Flood insurance can add $100–$400+/month to your PITIA, which directly reduces your DSCR. Always check the flood zone designation before making an offer. Properties outside flood zones save you significant money on both insurance and DSCR math.

Can military tenants break leases without penalty?

Yes, under the Servicemembers Civil Relief Act (SCRA), active-duty military can break a lease with 30 days' notice if they receive PCS (permanent change of station) orders or deployment orders. This means you may experience unexpected vacancy. Plan for it by targeting areas with deep military demand so you can re-rent quickly — near NAS Oceana and Little Creek, the next tenant is usually waiting.

Is Virginia Beach's oceanfront a good STR market year-round?

Peak season (Memorial Day through Labor Day) is excellent — occupancy rates hit 80–90% and nightly rates spike. The shoulder seasons (April–May, September–October) are decent. Winter (November–March) is slow — expect 30–40% occupancy at lower rates. Annual average revenue for a well-managed oceanfront 2BR condo is typically $38,000–$55,000. Model conservatively and make sure the numbers work even in a below-average year.

What's the difference between financing in Virginia Beach vs. Norfolk for DSCR purposes?

The DSCR loan itself works the same — same rates, same requirements. The difference is in the property economics: Norfolk has lower home prices (better rent-to-price ratios) but slightly higher property taxes and insurance. Virginia Beach has higher prices but access to the STR tourism market. Many investors hold properties in both cities to diversify.

Can I use a VA loan instead of a DSCR loan?

VA loans are for primary residences only — you can't use them for pure investment properties. However, some investors use VA loans to buy a primary residence, live in it for a year, then convert it to a rental and buy their next property with a DSCR loan. This "VA-to-DSCR ladder" is a popular strategy in military markets.

The Bottom Line

Virginia Beach and Hampton Roads offer something rare: a rental market with government-backed tenant demand. The military isn't going anywhere — if anything, the Hampton Roads military presence has expanded. BAH rates set a reliable rent floor, and the tourism economy provides STR upside.

DSCR math in Virginia Beach proper is tight at current rates and prices. The investors who succeed here focus on the right sub-markets (Kempsville for military families, the oceanfront for STRs, Norfolk for better price ratios), keep purchase prices in the $290,000–$370,000 range, and understand that some deals need 30% down instead of 25% to clear the DSCR hurdle.

The military rental market is as close to recession-proof as real estate gets. Pair that with DSCR financing that doesn't require income documentation, and you have a scalable strategy for building a portfolio in one of the most stable rental markets in the country.