If you're ready to begin your investment journey, there's no better state to start than cozy Connecticut, where real estate investors can find a plethora of opportunities for high-performing rental properties that will surpass even their most optimistic expectations.

While not experiencing the meteoric growth of other states, Connecticut's (GSP) was a highly favorable $250.2 billion in 2022, surpassing 2021 by 0.2%. Rents continue to rise, and its robust tourism economy remains strong.

Real estate investors nationwide have relied upon Visio Lending for its streamlined process, excellent DSCR loan terms, and dedicated customer service. Whether you're seeking to purchase long-term or short-term rentals there's no better place than Connecticut - and no better lender than Visio.



Benefits of Investing in Connecticut with a DSCR Loan

A DSCR loan allows you to access funding based entirely on your intended property's cash flow without income verification through tax returns and pay stubs, which are necessary with a conventional loan.

You don't need to worry about your previous debt obligations impacting your ability to access a mortgage loan, as DSCR lenders care only about your credit score and whether the property generates enough cash flow to cover the mortgage payment.

DSCR loans are only used for real estate investors and cannot be used for owner-occupied properties like the traditional home loan; this means they are perfect for the savvy real estate investor ready to enter Connecticut's hot market. Unlike other loan types, you can also secure a DSCR loan through a corporate entity, which protects your personal assets in the case of an issue with your property.

Regarding a DSCR loan, you have options everywhere, but Connecticut real estate shouldn't be overlooked. Its proximity to major cities like New York and Boston means that vacation real estate investors can expect a steady stream of tired tourists ready to relax; meanwhile, both property values are much lower in comparison to larger cities, so you can get a much better gross rental income than you would if you needed to finance a costly rental property.

Connecticut's industry centers extensively around institutes of higher learning, which means college rental properties and the attendant storefronts, offices, and restaurants that younger individuals want. The state also has extensive finance, healthcare, and advanced manufacturing sectors, perfect for those who want to buy an office building or a factory.

As a DSCR loan can be used for office spaces, storefronts, residential rentals, and more, you can be assured that wherever your real estate portfolio is centered, you can achieve excellent cash flow through simple, streamlined DSCR loans.


Requirements for a DSCR Loan - Connecticut

DSCR loans focus almost entirely on potential rental income rather than the borrower's annual debt obligations, so you do not need to provide income verification as you would with a traditional home loan or business loan.

There's no need to procure pay stubs or tax returns, but you do need to meet the minimum credit score, and the property needs to have a good DSCR ratio.

Credit Score

The minimum credit score for a DSCR loan in Connecticut is 680. Like with other loans, you will get better interest rates with a better score. Interest rates for DSCR loans are usually about 1% to 2% higher than other loan types.

Appraisal and Rent Schedule

The property needs to be appraised to ensure that it is worth the DSCR loan amount. In addition, the property's rental income must be assessed based on the average rate for rental properties in the area to ascertain the market value. This will be done through a 1007 Rent Schedule, which is then used to calculate whether your DSCR loan has a suitable return on investment.

Debt Service Coverage Ratio

The DSCR ratio is the gross rental income divided by the mortgage loan payments; it identifies whether the property has enough cash flow to honor the debt obligations of the investor.

For example, if your property makes $2,500 a month, but your PITIA (principal, interest, taxes, insurance, and association dues) is a combined $2,000 a month, you would have a DSCR of 1.25, considered a good DSCR ratio.

You should strive for this 1.25 ratio by identifying good properties and charging reasonable rent, as most lenders will not work with investors with a DSCR of 1.0. In other words, you're unlikely to be approved if your annual gross rental income does not surpass the annual debt.

LTV and Down Payment

For DSCR loans, lenders want a loan-to-value ratio of 80% or lower, which means you must provide at least a 20% down payment. The more you can provide upfront, the lower your annual debt and, thus, the higher your rental income. As with other loans, you will need to pay closing costs, typically 3% to 6% of the total loan.




Best Places for Purchasing Investment Property in Connecticut

Connecticut is full of charming hamlets and vibrant tourist destinations, meaning there's an opportunity for every real estate investor. Rental properties here range from short-term vacation real estate to long-term business leases.

Connecticut cities for invesment

📍 Fairfield

Fairfield has its fair share of vacationers and residents, boasting two universities and five beaches; it's also known for its vibrant downtown and numerous outdoor activities, making it a great place for short-term or long-term rentals. The average rental income here is $2,490, while commercial rent is $32.39 per square foot.

📍 Bridgeport

Known as "Park City," Bridgeport has over 1,300 acres of parks and numerous Fortune 500 companies in the surrounding areas; this makes it great for vacation rental properties and hospitality services. It's also much cheaper than Fairfield on the residential rental side, with rents of $1,415 per month. Commercial properties are slightly less expensive than Fairfield at about $31.80 per square foot.

📍 Waterbury

Prince Frederick is mostly known for its small-town charm and plentiful tourist attractions, meaning that vacation properties do very well here. Accordingly, rental income is higher here, at around $2,500; however, commercial space is cheaper, averaging $19.33 per square foot.

📍 Hartford

Hartford is an old city with deep roots, and its commercial district is well-known for the insurance company The Hartford; other businesses in adjacent industries, including finance, have also made their place here. It stands squarely within the middle of extremes, with apartments running an average of $1,424 per month and commercial spaces renting for $20.29 per square foot.

📍 New Haven

Ritzy New Haven was the place of the first tree-planting program in America, and it is also home to beautiful Colonial architecture. Those seeking a DSCR loan to develop and convert the quaint architecture would do quite well here, as would those acquiring a lovely storefront. Its elite status as a storied New England town is represented in its property values, as an apartment in "Elm City" runs for $2,048, while commercial spaces average around $31.09 per square foot.

No matter where you invest in Connecticut, you can rely on Visio Lending for your DSCR loan needs: we provide competitive interest rates and comprehensive service. Contact us today to learn how a DSCR loan can help you join the thousands of real estate investors enjoying a healthy rental income in this pretty seaside state.


Closed DSCR Loans Connecticut

Check out some of Visio Lending's recently closed DSCR loans in Connecticut.




Norwalk, CT

  • $290,000 Loan Amount
  • Cash-Out Refinance
  • LTR 
  • DSCR: 1.69


East Hartford, CT

  • $208,380 Loan Amount
  • Rate & Term Refinance
  • LTR
  • DSCR: 2.00


New Haven, CT

  • $650,000 Loan Amount
  • Cash-Out Refinance
  • LTR
  • DSCR: 1.50
map of Connecticut

Our DSCR Loans in Connecticut have:

  • · Full 30 year terms, no balloons for rental residential properties

  • · The ability to finance in an LLC

  • · No tax documents or personal income verification

  • · Real estate investor-friendly loan programs

  • · Interest only loan options


Contact Us to Start Your Loan