Home to many movers and shakers in American politics, Maryland has a strong economy of commuters who appreciate the convenience of apartments and small businesses.

While its population may not have the explosive growth of other states, it has grown steadily in 10 of the last 11 years, promising a constant flow of tenants and consumers for residential and commercial rental properties. What's more, the average annual salary in this state is $61,365, above the national average of $59,428.

DSCR loans are an excellent way for an experienced investor to gain an edge, as the streamlined process allows you to finance promising investment properties quickly while other investors are still seeking funding.

Visio Lending is one of the country's top debt service coverage ratio (DSCR) mortgage lenders, ready to provide you with the funds you need to get right into Maryland real estate with no delay.




Reasons to Purchase Investment Properties in Maryland

Rental properties in Maryland offer investors the perfect opportunity to diversify their portfolios and position themselves in a robust regional economy with plenty of potential - and a DSCR loan can help you achieve this dream.

Strong Rental Market

Approximately a third of Marylanders rent, which means boundless opportunities to boost your annual rental income through Maryland DSCR loans.

The average rent across the state is $1,875; if you purchase multiple rental properties at once, you could see hundreds of thousands of dollars in profit, making it easy to make a living off your property's cash flow.

Property values continue to rise across the state, having moved 1.2% from 2022 to 2023. While it may seem slow compared to other regions, this ensures that your rental property can continue to build in value over the life of your DSCR loan, ready to sell for far beyond your purchase price.

High Tourism

Being close to multiple major cities, Maryland is a hot tourist destination; travelers brought in $16.4 billion for the state's economy in 2021. Those who want to diversify their real estate portfolio through vacation rentals can expect an average profit of $687 per night: quite an impressive sum.

Diverse Economy

Tourism, manufacturing, and higher education: Maryland has an excellent mix of everything, and these strong commercial prospects ensure both small businesses and rental properties can thrive here.

Whether your real estate investments lie mainly in apartments or storefronts, you can be assured that there are plenty of investment opportunities within the region.

Steady Population Growth

Slowly but surely, Maryland continues to boost its population yearly: it has experienced an increase in 10 out of the past 11 years, generally a growth of 1% or more.

The influx of newcomers and young families means your property's ability to generate income will increase with the population, as property values match the increasing need for housing and commerce in this small state.

Substantial Tax Breaks

One of the best things about seeking a DSCR loan in Maryland is the incredible tax benefits you'll receive, especially for particular regions. For example, the Charles County Economic Development Department provides an ample tax credit for those who invest here, which can ease your expenses in the first difficult years of ownership.

Renovating properties, improving energy efficiency, and hiring employees for your property management company can all net you excellent tax breaks statewide, as can buying investment property in more disadvantaged areas.


Benefits of Maryland DSCR Loans

Securing Maryland DSCR loans is much simpler than traditional loans, as you need to provide personal information; the entire process is geared toward identifying the debt service coverage ratio rather than investigating your finances.

This makes the loan approval timeline much shorter, letting you start managing your rental properties immediately.

No Personal Income Verification Required

Because a DSCR loan is based almost exclusively on the property's net operating income, most DSCR lenders don't require income verification through bank statements or tax returns; the borrower's credit score is one of the only things DSCR loan lenders will look at regarding personal finances.

It doesn't matter what your debt-to-income ratio is or how many other debt obligations you have, just the property's income potential and that you meet the minimum credit score required.

This makes DSCR loans in Maryland an excellent choice for self-employed borrowers, who may find themselves locked out of a traditional loan despite being able to meet the monthly mortgage payments through the rental income.

Protect Your Assets by Purchasing Under an LLC

Conventional loans can only be taken out under an individual's name, which can pose problems for real estate investors: their finances are now inextricably tied to their business interests, and they may find themselves liable should there be an issue with their rental property.

Securing DSCR loans in Maryland doesn't require you to purchase under your name; you can instead buy under a corporation, which protects your interests.

Prudent Limits for Property Purchases

Traditional loans have a limit of 10 properties that can be financed with the same loan, but DSCR loans take a more balanced approach. Most DSCR lenders will allow you to invest more than this, with no maximum amount of properties you can roll into one DSCR loan.

Your lender will evaluate whether all the rental properties will generate sufficient cash flow to finance the mortgage payment; if you have a positive cash flow, you will likely get loan approval.

Visio Offers Competitive Interest Rates for DSCR Mortgage Rates in Maryland

While interest rates for DSCR mortgages are higher than that for conventional loans - about 1% to 2% higher - Visio works hard to craft loan terms that let real estate investors develop a healthy income from their rental properties.


Requirements for a DSCR Loan: Maryland

Like other states, receiving DSCR loans in Maryland is mostly about the property's income potential and the money you put upfront rather than personal income. While you don't need to provide tax returns or bank statements, you must meet particular stipulations before private lenders approve you for a DSCR loan.

Properties Eligible for a DSCR Loan: Maryland

Private residential homes - those that aren't generating income - are not eligible for a DSCR loan. Rural lands are also generally prohibited; however, this isn't much of a concern in Maryland, which is highly urbanized.

However, the list of potential purchases you can make with DSCR loans is quite expansive, ensuring that real estate investors have plenty of options:

  • Condominiums and townhouses
  • Single-family rental properties
  • Restaurants and cafes
  • Short term rentals
  • Office buildings
  • Factories
  • Storefronts

Visio Lending provides DSCR loans for 1-4 unit long-term rentals and vacation rentals.

Credit Score

To receive DSCR loans, real estate investors should expect to have a credit score of 680 or better. If you still need to build up your credit score but wish to enter the real estate market, we can recommend other options, such as conventional loans.

Minimum DSCR for Maryland

The debt service coverage ratio is how lenders evaluate whether the property's net operating income will cover your monthly mortgage payment. If it's below 1, you have a negative cash flow, while a DSCR above 1 shows that the property's cash flow exceeds your loan payments and you're generating income. Most lenders want a DSCR of at least 1.2, though many will expect higher.

Loan To Value (LTV) Ratio

A DSCR lender wants a loan-to-value ratio (LTV) of 80% at most, with 75% being more standard. This means you must provide a minimum down payment of 20%.

Prepayment Penalty

Most private lenders who offer DSCR loans include a prepayment penalty: a percentage of the principal that's taken if you pay your loan amount ahead of time. This protects non-bank lenders from loss on a DSCR loan; it is usually on a "step down" basis, with decreasing penalties for the first few years.

It's important to note that in Maryland, the prepayment penalty can only be applied for the first three years of the loan, which means that the "5/4/3/2/1" step-down prepayment penalty is not applied in this state.




Steps to Applying for a DSCR Loan - Maryland

DSCR loans are surprisingly simple to apply for, given that no personal income verification is required: most of the effort goes into identifying the property's cash flow and calculating the all-important DSCR formula.

DSCR Loan Steps Outlined

Identify Your Chosen Property

First, you need to have a property in mind. You should do your research carefully on the right region, location, and neighborhood in which you'd like to purchase.

Identify the Best DSCR Lenders

DSCR lenders vary by their requirements, so it's important that you find a lender you can trust. Please read reviews and explore their stipulations before you submit your application.

Submit Proof of Income from Your Property

Your property's cash flow is the most crucial part of the DSCR loan process. If the property has previous lease agreements and returns identifying its income, you must submit this to the lender. However, if there is no previous tenancy, the DSCR lender will rely on the 1007 Rent Schedule to calculate the expected rental income.

Submit a Rent Schedule

This helps to identify how much rental income you can expect to receive from the property according to market prices and is performed by an appraiser.

Receive an Appraisal

Lenders want to see that the purchase price matches the appraisal price, so they will need proof from an appraiser that the cost is justified. This will then be used to calculate your mortgage payments and balance them against the rental income to calculate the debt service coverage ratio.

Calculate the DSCR and the LTV

After tabulating the expected income, this will be divided by your PITIA (principal, interest, taxes, insurance, and association fees) to identify the DSCR. If it's above 1.2, your DSCR lender will set the loan-to-value ratio in relation to your credit score and the property value, which will determine how much you will need to provide as a down payment.

Provide the Down Payment and Close

Lastly, you'll close on the property: you sign a contract with your lender and provide the requested down payment, after which time you can take ownership of the rental property and begin securing tenants. If you have purchased multiple rental properties with the same DSCR loan, the process remains mostly the same, as the monthly mortgage payments go to finance all listed properties. 



Best Places for Purchasing Investment Property in Maryland

Maryland has numerous different small towns hiding perfect investment property, so it's essential that you take your time and research each one before deciding where to pursue DSCR loans in Maryland. Our top five picks are based on expected rental income and overall prospects.

Maryland Cities for Investment

📍 Columbia, MD

Close to Washington, DC, Columbia has a vibrant commuter community and a busy downtown. The average rent is $2,066 monthly, while commercial rental income is about $26.10 per square foot. What's better, rents have increased by about 1.7% yearly, and commercial vacancies have dropped significantly.

📍 Baltimore, MD

One of the state's largest and most well-known cities, Baltimore relies on a mix of manufacturing, technology, and shipping to earn its keep; this diverse economy gives real estate investors plenty of options for developing rental income. The average rent for all residential property types is $1,500, while commercial space rents for $27.78 per square foot.

📍 Prince Frederick, MD

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.

📍 Hyattsville, MD

Hyattsville is known for its affordable housing and is considered a "hidden gem" by Maryland real estate investors, who see great promise in its population growth and urban development initiatives. Average rents here are $1,634 monthly, and commercial space runs for $27.00 per square foot, which is quite high considering its small size.

📍 Chesapeake City, MD

Chesapeake City is a popular vacation destination with a fascinating view of the harbor from land. Despite the plentiful foot traffic, renting is very affordable here at $1,177 per month, and commercial space is also cheaper at $23.81 per square foot. This makes it a great entry for younger developers who would like to leverage Maryland DSCR loans to build up their portfolio.


Closed DSCR Loans Maryland

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




Bowie, MD

  • $200,000 Loan Amount
  • Cash-Out Refinance
  • LTR 
  • DSCR: 1.52


Parkville, MD 

  • $154,000 Loan Amount
  • Cash-Out Refinance
  • LTR
  • DSCR: 1.55


Baltimore, MD

  • $117,000 Loan Amount
  • Cash-Out Refinance
  • LTR
  • DSCR: 1.611

Frequently Asked Questions About DSCR Loans

The maximum loan amount is typically $5 million for a single loan, which can be spread out across multiple properties. There is also a minimum loan amount of $75k and a minimum property value of $150k.




There is no limit to how many DSCR loans you can take out in Maryland, though your DSCR lender may not approve you for another one depending on the metrics of the current loan. Thankfully, you can use one DSCR loan to finance multiple properties, which makes it easier to avoid having to take out multiple loans when you have decided on a group of rental properties that you would like to purchase.

A property's net operating income refers to the revenue it has made after operating expenses, like mortgage payments, have been deducted. The DSCR is closely tied to this: if you have a net operating income that is 1.2 times what you spend to operate the property, then you have a high enough DSCR to get a loan.

Yes, you can refinance using DSCR loans. This is very common for real estate investors using the BRRRR method, as it ensures that you do not leave any money on the table when you sell the property. You can use a DSCR cash-out refinance to draw money out of the project, which can then be used to finance your next acquisition.

However, it's important to note that you can still be subject to a prepayment penalty if you open a 30-year DSCR loan and then pay it far ahead of time. Most lenders also have a seasoning period of at least six months before they will allow you to refinance a loan, including DSCR loans.

If your property's cash flow is not sufficient enough to secure a DSCR loan, you still have other options, including the following.


Asset-Based Loans: These identify your creditworthiness based on your current assets; it's assumed that should your rental property provide little to no income, you can pull these assets to finance the loan.

Bank Statement Loans: Available to those who have unusual incomes that are difficult to verify. It still requires income verification, but it uses bank statements instead of the typical W2 and tax returns.

Interest-Only Loans: This allows you to only pay the interest for a set amount of time, after which you will begin paying the principal, which is useful if you suspect you will have trouble finding tenants for your rental property.


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Our DSCR Loans in Maryland 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