When you think of Indiana, what comes to mind? Some may say the vibrant agricultural industry, with budding fields and the eighth-largest agricultural export in the nation. Other answers may follow their favorite racecar to the Indianapolis 500 or talk about the advanced automobile manufacturing plants. There are colleges and sporting events, concerts, and museums.

With the right DSCR loan, Indiana investors can enter a lucrative rental property market.

Indiana is a destination and a home, a bright and bustling midwestern state that continues to grow and attract more people, residents, and visitors alike. With high occupancy rates and job growth, Indiana's economy is surging now that they've recovered from the nationwide pause in 2020.

Visio Lending is the preferred DSCR lender for thousands of rental investors wanting to generate a steady income from rental property in Indiana; we've been helping finance investment residential and commercial investment properties for almost two decades. Our financial experts can help you choose the right loan type to tap into the market - without requiring you to submit tax returns and other personal income information to get a DSCR loan.




Why to Invest With a DSCR Loan: Indiana

Indiana is a landlord-friendly state with great legal protections for landlords. There are no rent control laws in place, so landlords are free to increase rent so long as they provide 30 days' notice.

Landlords can also charge security deposits and late fees. Evictions can happen ten days after non-payment, so tenants are more likely to work with landlords to make up for delinquencies.

Indiana laws and regulations are pro-business, offering incentives and support for small businesses. They make it easier for investors to manage rental properties, leading to more cash flow and higher DSCRs.

Indiana also has a bustling population and was ranked number 5 in CNBC's 2023 best infrastructure list. Most residents of Indianapolis rent, creating a huge market for investors.

High Economic Growth

Indianapolis alone boasts a strong economy with low unemployment and high job growth. Several Fortune 500 companies call the city home, and the technology and life science industries are thriving.

Many young professionals are flocking to the cities for job opportunities, and they need to find affordable places to rent. Let's not forget the college students in Indianapolis, who are a perfect market for rental investors seeking to make rental income from apartments.

A Diverse Economy

Indiana hosts employers from various industries, with the current top five being Healthcare, Logistics and Transportation, Manufacturing, Public Sector, and Technology.

With an adjusted gross income tax for corporations of 4.9%, it's little surprise that business owners are putting down roots in Indiana.

Increasing Population

World Population Review reports that Indiana's population as of September 2023 was at an all-time high of 6,852,542, with a growth rate of 0.29%.

Growing populations are always a good indicator of a solid housing market, and newcomers mean more renters— both for residential and commercial properties. Young families just starting out tend to prefer renting as they build their income, which means that single-family homes are an excellent target for Indiana DSCR loans.

Affordable Real Estate Prices

Mashvisor reports that there are currently 9,699 homes for sale in Indiana, with a median property price just shy of $370,000.

According to Zillow, Indiana home values are up 4% from last year, with an average value of $231,519. Their Market Overview also reveals:

  • 1.000 Median sale-to-list ratio (as of June 30, 2023)
  • 37.8% of sales over list price (as of June 30, 2023)
  • 41.0% of sales under list price (as of June 30, 2023)
  • 6 Median days to pending (as of July 31, 2023)

In terms of particular cities, Zionsville has the highest Zillow Home Value Index at $577,280 and an average rental income of $1,304.

Indiana DSCR loans are perfect because, with the more common-sense property limits that DSCR lenders prefer, you'll be able to quickly develop a very healthy portfolio that satisfies your financial needs. Properties move incredibly quickly here; given that conventional loans have such a long approval rate, your preferred investment may be long gone by the time you can get financing.


Exploring Indiana's Rental Market

Indiana offers various bustling markets for rental property investors, with cities like Indianapolis, Fort Wayne, Evansville, and South Bend all providing ample investment opportunities. Mashvisor shows a seller's market in Indiana's real estate, with good cash-on-cash returns for investment properties and an Airbnb occupancy rate in the high fifties for many neighborhoods.

Current Indiana rent trends vary from the low $500s to over $2,000 based on region and property type, but most apartments (as in, 68%) fall into the $1,001-$2,100 range.

Indianapolis presents an exceptional market, which is exactly why a DSCR loan makes sense here. With a population of over 890,000 and a strong potential for cash flow and price appreciation, the city is ripe for real estate investors. Indianapolis offers numerous attractive neighborhoods to live in with great cost of living, so there is no shortage of potential renters.

Additionally, the state of Indiana is considered 'landlord friendly,' making it one of the better states to invest in real estate. In fact, it's number 9 on RealWealth's list of the top twenty and number 3 in Steadily's top 12. DSCR loans help investors break into the market quickly and easily without worrying about their personal financial situation.

As of Summer 2022, Indiana boasted a rental vacancy rate of 7.8%, with 30% of households renting. Home price appreciation in Indianapolis was on the rise in Q1.

What's In Demand

Despite the large opportunity for most forms of property, single-family residences are in high demand throughout Indiana. With a DSCR loan, Indiana investors can build a lucrative real estate portfolio fairly quickly by investing in neighborhood homes.

With the current work-from-home culture, more renters are looking for a nice place to work and spend time with their families away from the crowds in the city. The affordability of Northwest Indiana properties, as well as their proximity to the major town of Chicago, makes Indiana DSCR loans incredibly popular in the northern reaches of the state.

However, don't discount commercial rental property here, either. The strong focus on work-from-home means that residents are spending more time in their own neighborhoods: they might pop out for a quick coffee from a local cafe between meetings, or decide to indulge in a staycation nearby. A DSCR loan for small shops like boutiques, restaurants, and gyms would be an excellent option for rental investors who would like to fill these niches for homegrown goods.

Hot Spots for Rental Properties in Indiana

According to Clever, the top five regions for an Indiana DSCR loan in 2023 are as follows: 

  • 📍 Indianapolis

    • Home value median: $144,200

    • Average rental price: $1,100

  • 📍Fort Wayne

    • Home value median: $132,700

    • Average rental price: $1,099

  • 📍Fishers

    • Home value median: $265,500

    • Average rental price: $1,550

  • 📍 Mishawaka

    • Home value median: $117,400

    • Average rental price: $1,089

  • 📍 Lafayette

    • Home value median: $139,000

    • Average rental price: $1,425

Opportunities for Commercial Property Investment with a DSCR Loan: Indiana

In areas with large populations, commercial property under a DSCR loan can offer an experienced investor a substantial amount of rental income. Indiana's pro-business stances draw in employers from all industries, leading to ample demand for commercial space to rent.

Commercial real estate in major cities like Indianapolis and South Bend can be a lucrative investment, helping raise a borrower's overall ratio for future investments. From apartment complexes to office space, everyone needs a place to work and a place to live.

**At this time Visio Lending only offers loans for 1-4 unit residential rental properties, including vacation rentals.



Indiana's Tourism Industry Performance

Indiana's tourism industry is performing well; data from June 2023 shows spending up to the same levels seen in June 2019, pre-pandemic. This data follows a strong report in May 2023 regarding Indiana's economic rebound. The Indiana Destination Development Corporation is also allocating funds to more marketing programs to attract more visitors.

With plans to host a Taylor Swift concert in 2024 and the ever-popular Indianapolis 500, aka "The Greatest Spectacle in Racing," the tourism industry shows no signs of slowing down.

Family Friendly Attractions

Indiana is filled with fun and educational activities for families with children of all ages. Indianapolis hosts a wealth of museums, including the Children's Museum of Indianapolis, while families looking for outdoor excursions could check out the Indiana Dunes National Park or the Wellfield Botanical Gardens.

Romantic Getaways

Many couples travel to Indiana to experience their vast wineries, quaint inns, and exquisite casinos. Bed & breakfasts are another popular choice, particularly in Wabash and Michigan City. However, plenty of lovebirds always appreciate the luxury available in Indianapolis - especially because this comes at a much cheaper price than other Midwestern getaways like Chicago.

A DSCR loan can help you manage various properties, such as wedding venues and hotels, to take advantage of this thriving market.



Conventional Loan Versus DSCR Loan - Indiana

DSCR loans and Conventional loans both have their merits. However, conventional rental loans must adhere to strict underwriting guidelines laid out by Fannie May and Freddie Mac. Traditional loans do offer lower interest rates, by 1-2%, but borrowers must provide their W2s and a higher down payment.

With a DSCR loan, Indiana rental investors don't have to worry about pay stubs or personal income verification like tax returns.

How does a DSCR Loan Work?

To get a DSCR loan, you'll need a good DSCR ratio, which is calculated from the property's income potential and estimated expenses, with no need for the borrower's tax returns. DSCR lenders will calculate DSCR by dividing the expected income of the rental properties by the loan amount, which will then prove whether or not the property's income will cover the loan repayments.

This primary focus on the property's income rather than your own makes DSCR loans a very investor-friendly loan type in comparison to a conventional loan.

Benchmarks for a DSCR Loan | Indiana

DSCR loan requirements include a debt-service coverage ratio of at least 1.00 and a minimum credit score of 680.

Most DSCR Lenders also like to see proof of prior successful property management, though new real estate investors aren't automatically declined.

Many Indiana investors find the lower down payments and faster processing time worth the slightly higher interest rate.


Closed DSCR Loans Indiana

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


Indianapolis DSCR Loan


Indianapolis, IN 

  • $195,600 Loan Amount
  • Purchase
  • LTR 
  • DSCR: 1.00
South bend LTR


South Bend, IN

  • $187,500 Loan Amount
  • Cash-Out Refinance
  • LTR
  • DSCR: 1.59
Gary STR


Gary, IN

  • $220,500 Loan Amount
  • Cash-Out Refinance
  • STR
  • DSCR: 1.97

DSCR Loan | Indiana FAQs

Offering to cover closing costs can help seal the deal on a property offer.

Closing cost restrictions vary by DSCR lender. Generally, a seller can pay costs up to a certain percentage of the property value.



DSCR lenders look at net operating income compared to annual expenses such as insurance and monthly mortgage payments.

To calculate DSCR potential before reaching out to lenders, investors can look at average or median rent for the property type they are considering to estimate the property's cash flow; then, they can look at average utility costs, monthly loan payments, and insurance costs.

DSCR indicates whether an investment property can pay its debts and still pull a profit.

A DSCR of 1.0x means your property does cover its debts, but you have no remaining profit. Less than 1.0x reveals a negative cash flow. Anything over 1.0x is good but not necessarily strong. This is why many DSCR lenders only offer DSCR loans to property managers with a DSCR of 1.25x or higher.

1.5-1.6x tends to be the average for strong DSCRs and can help borrowers request higher maximum loan amounts or better terms.

Banks, credit unions, and private lenders like Visio all offer Indiana DSCR loans for residential and commercial properties. Most DSCR loans in Indiana are taken through private lenders. With over a decade of experience, Visio has a well-established history of financing investment properties with competitive terms and great service.


For a DSCR loan, Indiana lenders have more flexibility than with traditional mortgages. While a standard minimum would be around $100 thousand, the maximum can reach up to $5 million.

Every loan will vary, but most DSCR lenders will take a few weeks to assess everything from property details to your financials. This is much faster than with a conventional loan, which can take months to go through - another reason why investors prefer to use a DSCR loan to build their real estate portfolio.

No. A hard money loan specifically helps guarantee the acquisition of an asset with short-term funding. In contrast, DSCR loans provide longer repayment plans with more flexible terms for rental properties.

DSCR Landing Page bottom grpahic (38)-1

Our DSCR Loans in Indiana 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