Use DSCR Loans to Grow Your Rental Portfolio in Georgia

Real estate investors in Georgia are using debt service coverage ratio (DSCR) loans to expand their portfolios. DSCR is calculated by taking the monthly rental income and dividing it by the property's monthly expenses including principal, interest, taxes, insurance, and association dues (PITIA). The final debt service coverage ratio is essentially an indicator to the lender of a borrower's ability to repay their loan. Many lenders have a minimum DSCR of 1.2, which indicates positive cash flow.

DSCR loans are ideal for self-employed investors or investors with large portfolios. Their simplified approval process and loan terms are designed specifically for real estate investors. Let's take a closer look.


Georgia DSCR Loans Look at Cash Flow Rather than Personal Income

Traditional loans focus heavily on debt-to-income ratio (DTI) and require substantial documentation including pay stubs, bank statements and tax returns. Meeting debt-to-income ratio requirements can be tricky for investors with multiple mortgaged rentals. On the other hand, DSCR loans have qualifications based on a minimum credit score and are underwritten using the property's income potential.


Georgia DSCR Loans Offer Flexible Terms and Fees

With a DSCR loan, borrowers can take advantage of full 30-year terms with no balloons. Most DSCR lenders will also have the optionality for interest only loans, rate buy- downs, prepayment penalty buy downs, and rate structure choices. It is great for investors to be able to tailor their DSCR loan program to meet their investment needs. For instance, investors planning to hold onto their rental property long term can choose a fixed rate and pay higher fees, while investors who might sell in the near future can select an ARM rate structure and buy down their prepayment penalty.


Georgia DSCR Loans Have More Flexible Common Sense Limitations on Number of Mortgaged Properties

For the professional investor looking to build a large real estate portfolio, a DSCR program is ideal. Most traditional lenders max out borrowers at ten loans. Instead, when evaluating qualifications for a DSCR loan, lenders will use common sense to evaluate an investor's maximum credit exposure.


How to Calculate and Optimize DSCR Ratio

To calculate DSCR, use this simple formula:


A debt-service coverage ratio of 1 indicates that the monthly expenses of a subject property are equal to the monthly payment. For instance, if your monthly expenses are $1,800 per month and a tenant pays you $1,800 per month, you are breaking even. There are some simple ways to optimize the DSCR calculation:

  1. Increase your down payment. Raising your down payment is the simplest way to improve debt-service coverage ratio. This will lower your rate, and therefore your  monthly expenses and DSCR.
  2. Negotiate your taxes and insurance. By fighting your property taxes and lowering your insurance payments, you can bring down your debt-service coverage ratio.
  3. Buy down your rate. Some lenders will provide you with the opportunity to buy down your rate. This will increase your closing costs, yet decrease your monthly payments and DSCR. 



Georgia Boasts a Strong Rental Market Due to High Quality of Life and a Growing Economy

There are many qualities that make Georgia attractive to investors, according to Roofstock. A growing economy, booming job market, high quality of life, and affordability are just some of the many appealing factors. In terms of the rental market, Georgia rents are increasing anywhere from 3-14% year-over-year, and 36% of the state’s housing units are renter-occupied, with single-family homes accounting for the largest share of housing units.


Atlanta is the number one city where we originate DSCR loans, and Roofstock highlights its investability. The state's capital is also its largest metropolitan area with 6.1 million people. And the rental market is thriving. 36% of housing units in Atlanta are occupied by renters with single family homes being the largest share of property types. The median rental income on a three-bedroom home is $1900 per month, and the rents historically have increased anywhere from 3-14% year-over-year. It's no wonder Visio finances so many Atlanta properties.

For investors looking to purchase rental properties in Georgia, here’s where Mashvisor recommends looking in addition to Atlanta:

  • Marietta, GA: Not far from downtown Atlanta, Marietta offers investors an average monthly rental income of $1,850 and a 3.1% cash-on-cash return. The city is relatively affordable with a $428,518 median property price.
  • Sandy Springs, GA: Although Sandy Springs has a higher median property value of $580,875, it also has a higher average monthly rent of close to $3,000. Investors can take advantage of a 3.28% cash return
  • Peachtree City, GA: Peachtree was named one of’s best places to live in the U.S. It offers investors a $501,035 median property price, over $2,000 in average monthly rent, and a nearly 3% cash-on-cash return
  • Woodstock, GA: This Georgia town offers an affordable median property price at $476,886 and a rental income averaging $1,730 per month.

Closed DSCR Loans Georgia

Check out some of our recently closed DSCR loans in Georgia.


Atlanta, GA DSCR Loan


Atlanta, GA

  • $516,000 Loan Amount
  • Purchase
Blue Ridge, GA DSCR Loan


Blue Ridge, GA

  • $386,250 Loan Amount
  • Cash-Out Refinance


Mineral Bluff, GA

  • $1,080,606 Loan Amount
  • Cash-Out Refinance
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We are proud to offer investors in Georgia:

  • · Full 30-year terms, no balloons

  • · Qualify based on rental income rather than personal income; No tax documents or employment verification

  • · Common sense underwriting for your short term rental properties

  • · The ability to finance in an LLC

Contact Us to Start Your Loan