As one of the 13 original colonies, Massachusetts property has been in demand for centuries: it has an advantageous position on the Atlantic coast and is home to some of the most prestigious universities in the country. This strength continues into the 21st century, where real estate investors still strive to secure high-status property for their real estate portfolio.

DSCR loans are a game-changer for those who want to purchase investment properties, as they rely on the property's cash flow rather than a borrower's income verification to ascertain how much a borrower can afford. Lenders will only look at a borrower's credit score: there's no need for employment verification, tax returns, or calculating your debt-to-income ratio. This makes the application process faster and helps you reach your financial goals sooner.

If you're ready to invest in rental properties throughout the Bay State, rely on Visio Lending, a reputable and well-known DSCR lender with thousands of satisfied real estate investors amongst our clientele. We'll help you finance high-quality rental property throughout Massachusetts, whether short-term rentals, single-family homes, or office spaces, through a debt service coverage ratio loan.



Reasons to Buy Investment Properties in Massachusetts

The Old Colony State is also an old standard for investors, showing continued investment potential year after year. Its major cities maintain high property values, with Boston averaging over $500,000. Regardless of the property types you'd like to purchase, an investment in Massachusetts is always wise, and DSCR loans make it easier than ever to begin generating rental income.

Powerful Market for Rental Properties

Massachusetts has a serious housing crunch, so acute that officials in Boston are offering tax incentives for developers who convert office spaces to apartments. Rental properties have a vacancy of only 2.8% statewide, making it the tightest rental market in the entire country.

Economic Stability

With so many people seeking to live and work in Massachusetts, its economy remains strong in nearly every sector. Massachusetts' GDP grew by 4% in the second quarter of 2023, which is staggering compared to the nationwide growth of only 2.4%. The state also has a highly differentiated economy of in-demand products, including healthcare, construction, information technology, biotechnology, and financial services.

Strong Rental Laws

State laws around rental properties are very advantageous, which is why so many investors choose this real estate market. Massachusetts has no rent control, meaning you can charge a competitive rate without concern.

In addition, all tenants have a list of obligations that keep your property in good repair, such as paying rent on time, undertaking minor maintenance on their own, not ending their tenancy early, and accepting responsibility for damages beyond minor wear and tear. Property taxes are pretty high here, but this is more than offset by the significant earning potential.


Requirements For a DSCR Loan: Massachusetts

Unlike conventional loans, debt service coverage ratio loans do not rely on personal income to determine loan amounts; instead, they consider if the property's cash flow is sufficient to cover operating expenses and produce profit.

DSCR loans do not require borrowers to disclose their personal finances other than their credit score, as all that matters is the DSCR ratio: the rent divided by the mortgage payment. To qualify, you won't need to provide pay stubs for income verification, nor will you need to show tax returns or your own debt obligations.

Minimum Credit Score of 680

For DSCR loans, most lenders want a credit score of at least 680; however, given that Massachusetts is such a competitive market, you can get a lower interest rate and more funding with a better score.

Appraisal and Rent Schedule for Rental Properties

The property's ability to generate sufficient cash flow for your loan payments is determined by the appraisal and the rent schedule, which show how much the investment property is worth and what income it can produce.

You will need to have your rental properties appraised to see their market values, then have an assessment done to determine the market rent in the area. If your investment property has been previously rented, you'll produce lease agreements and other documents for rental income verification.

Once this is complete, you have everything necessary to calculate the debt service coverage ratio, which is the most significant determinant of whether you qualify for a DSCR loan.

Minimum DSCR Ratio of 1.00

For a DSCR loan, you need to prove that the property's cash flow will cover mortgage payments; this is called the DSCR ratio, which divides rents by the overall debt service (principal, interest, taxes, insurance, association dues).

Lenders want a minimum DSCR ratio of 1.00, but 1.20 or higher is better as this shows that the property income will generate sufficient cash flow both to cover the loan and generate a net operating income.

Down Payment

The loan-to-value ratio determines your down payment, which identifies how much you are borrowing versus how much the lender has received upfront. The maximum loan-to-value ratio for a DSCR loan is 80%, though many lenders prefer a 75% ratio. This means you'll have to pay 20% to 25% upfront.

Prepayment Penalty

Most DSCR loans have a prepayment penalty, which means that if you repay your loan ahead of time, you'll have to pay a percentage point of the principal. This protects lenders as it provides a portion of the interest they would have gained over the long term.

You can generally expect to repay at least 5% of the loan amount if you repay within the first year, and typically, there are no penalties for extra loan payments after the first five years.



Best Investment Locations in Massachusetts

DSCR loans in Massachusetts cover the gamut of residential rental properties, office spaces, retail buildings, restaurants, hotels, and manufacturing facilities. However, choosing your location wisely is essential, as every real estate market in the state has different pros and cons.

When selecting where to pursue DSCR loans, we encourage you to take a closer look at these cities, which have shown strong population growth, economic potential, and diverse investment property opportunities.

Massachusetts DSCR Loans Boston

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📍 Boston

The capital city of Massachusetts has always been an excellent place for investment properties. One of the major cities in New England, Boston is a significant technology, higher education, and healthcare hub, thanks to the presence of Harvard University, the Massachusetts Institute of Technology, and Tufts University in its boundaries.

The average rental property income is an astounding $3,250, while commercial spaces can generate $61.34 per square foot.

📍 Worcester

This is the fastest-growing city in Massachusetts, and it's easy to see why: With multiple universities, a highly diverse population, and a strong emphasis on innovation, Worcester is a powerhouse of economic potential. Despite having plenty of cultural attractions, it's also much cheaper than Boston, as a residential property's cash flow is around $1,950 per month.

Interestingly, there's a significant discrepancy between office and retail rents: office space rents for $24.39 per square foot, while retail space costs $17.78 per square foot. This suggests room in the real estate market for more retail activity, making it a great place for retail DSCR loans.

📍 Aquinnah

Aquinnah, on the island of Martha's Vineyard, focuses on luxury and leisure property types. The property values are incredibly high, with the average home worth $2,207,932; some homes sell for over $7.5 million. Still, rents are lower here than in Boston at around $2,300.

With Aquinnah, your best bet is in vacation rental property, which can provide an average of $1,198 per night.


The largest municipality on Cape Cod, Barnstable, is home to breathtaking scenery, diverse wildlife, and a friendly downtown. Vacationers flock to the region to enjoy its art galleries, small shops, and excellent food scene, ensuring steady tourist income throughout the summer.

Residential rental property provides about $3,000 per month; commercial spaces are sparse here, but they average about $20 per square foot.

📍 Newton

Newton is renowned for being family-friendly, and housing excellent schools and educational institutions; this means that larger residential rental property is very popular with younger families. It also has a quaint and vibrant downtown with a strong need for amenities like cafes, clothing stores, and gyms.

Thanks to its residents' high average household income - an incredible $228,218 - residential rents are even higher than Boston, at $3,575, while commercial space rents for $31.54 per square foot.

📍 Marblehead

Historic Marblehead was once one of the major cities for shipping and shipbuilding, but it now hosts a quiet downtown and luxury homes. Like Newton, this is a costly real estate market: the average rent across all residential property types is $3,500. As it's a relatively petite city, the commercial rental property values are lower, with average rents around $18.75 per square foot.


Top Tips for Real Estate Investors Seeking a DSCR Loan: Massachusetts

While nearly all Massachusetts property generates enormous income, choosing wisely and thinking carefully about your investment property needs before diving in is important. Depend on these top tips to guide you as you prepare to reach your greatest Massachusetts investment potential through a DSCR loan.

Rely on Local Expertise

Local realtors and other professionals can provide guidance that those outside of Massachusetts cannot. They'll know the best markets and be able to explain the intricacies of each specific market you'd like to pursue. If you want to purchase multiple properties across the state, it may be best to divide your search area up by region and speak to professionals in each area. The more support you have as you prepare to invest in Massachusetts, the better decisions you can make.

Connect With a Realtor Familiar with DSCR Loans

A savvy realtor can greatly help real estate investors, as they will focus on up-and-coming neighborhoods with great investment properties to purchase. They'll also be familiar with the investment process through DSCR loans.

Don’t Shy Away from Smaller Cities

While you should never bet against Boston, it's easy to become starry-eyed and think only of major cities when seeking a DSCR loan. However, smaller cities are great for real estate investors with a small budget - and they can help you build momentum to capture those larger cities.

Think About the Long-Term Potential

It's easy to think about quick returns when it comes to investment potential, but slow and steady is often the way to go when it comes to DSCR loans.

A DSCR loan is intended to nurture long-term investment thanks to the prepayment penalty, so expand your timeline to at least 10 years and assess the overall real estate market in the region when deciding whether a property is worthwhile.




Closed DSCR Loans Massachusetts

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


Worcester DSCR Loan


Worchester, MA

  • $457,000 Loan Amount
  • Cash-Out Refinance
  • LTR 
  • DSCR: 1.52
MA SFR Rental


Boston, MA 

  • $770,000 Loan Amount
  • Cash-Out Refinance
  • LTR
  • DSCR: 1.18
Springfield MA  DSCR Loan


Springfield, MA

  • $288,000 Loan Amount
  • Purchase
  • LTR
  • DSCR: 1.39

Frequently Asked Questions

Charging more rent is one of the best ways to improve your DSCR, especially as Massachusetts has no rent controls. In this state, you can't charge more for pets, so including pets as part of a rental agreement can be very attractive to tenants.

Yes. We don't need any personal income information, only the borrower's credit score. The primary concern is the property's ability to generate a strong net operating income.


You can have multiple loans; all that matters is the property's ability to generate sufficient cash flow. However, as you can roll several properties into one DSCR loan, you may find that only one loan suffices.

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Our DSCR Loans in Massachusetts 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


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