Real Estate Investors, old and new, are capitalizing on the steady rental income streams and low prices created by the pandemic. To expand their real estate portfolio, many investors are financing with a Debt-Service Coverage Ratio (DSCR) Loan. Virginia invites many property investors to a steadily growing real estate market with a wealth of opportunity in both residential and commercial rentals.

Virginia has a rich history, a firm military presence, and gorgeous beaches and trails for residents to explore. Between a long list of activities to enjoy and thriving centers full of job opportunities, the market in Virginia is calling for more available rental properties.

DSCR Loans are helping investors answer the call. With an affluent history of its own, Visio Lending has helped investors across the US finance rental properties with competitive interest rates. Visio Lending can help you find the perfect loan to fund your property.



Why Invest in Virginia Real Estate?

Virginia DSCR Loans allow borrowers to access a rich and varied real estate landscape. Virginia has something for everyone, from pristine rural getaways to bustling, lively urban centers in Northern Virginia. Due diligence, timely decision-making, and strategic planning can turn a beginning real estate portfolio into a lucrative endeavor.

According to Forbes, Virginia real estate is a solid investment. The state is conveniently located near Washington D.C. but also features coastal areas, rich and historic cities like Richmond, gorgeous retreats like the 140-mile stretch along Shenandoah Valley, and more.

The Virginia market has been a seller's boon, but it is slowly balancing between buyers and sellers. However, there is no sign of a crash in the near future. Virginia investors can count on a steady market for the foreseeable future.

Take some time to fall in love with the state, and you'll invigorate your drive to build a firm real estate portfolio and make your properties the best rentals around. A DSCR loan in Virginia can help.

A Diverse and Stable Economy

Virginia's coastal economy is home to several tourist hubs, like Williamsburg, and job opportunities. In fact, Virginia hosts the only shipbuilding company responsible for the US Navy's nuclear-powered aircraft carriers. The large workforce helps stabilize the local economy, while attractions pull in tourists of all ages, and students of the many higher education facilities in the state provide a constant demand for short-term rentals.

The more you know about the area your investment or rental property is in, the better you can estimate if you qualify for a DSCR loan.

Landlord-Friendly Real Estate Regulations

Virginia's laws offer a balanced approach to protecting landlords and tenants, with several regulations to help landlords manage their property. Security deposits can equal two months of rent, and landlords don't have to pay interest on the deposits.

There are specific disclosures landlords are responsible for providing regarding the value and safety of a property.

Tax Benefits for Virginia Real Estate Investors

Virginia has a low property tax rate, averaging 0.86% compared to the national 1.1%. The corporate income tax is only 6% as well, saving you a decent amount of money over the life of your DSCR loan.

Virginia also offers the Land Preservation Tax Credit program and Opportunity Zones that offer tax incentives to investors for investing in distressed communities.

Lastly, Virginia is one of the only remaining states that allow capital gains tax to be deferred through a 1031 exchange.


A Look at the Virginian Housing Market

Virginia DSCR Loans

Redfin Data reveals a shifting market with overall improvements. Demand is only down 0.88 points, and the three-year trends show an overall rise. Supply, however, has been steadily declining, with only 2-months' worth in the current market. As a result, the median sale price is going up.

Zillow data analysis reveals the average home value in Virginia is $372,943, boasting a 3% increase over the past year. Their Market Overview goes on to report:

  • 1.005 Median sale-to-list ratio (as of June 30, 2023)
  • 54.6% of sales over list price (as of June 30, 2023)
  • 24.7% of sales under list price (as of June 30, 2023)
  • 8 Median days to pending (as of July 31, 2023)

Types of Investment Property to Consider for DSCR Loans in Virginia

Virginia DSCR Loans can finance (or refinance) most residential retail and commercial properties. You can determine what type of property to finance by exploring the area you want the property to be in.

City hubs like Richmond can always benefit from new office buildings, while areas like Charlottesville see residents willing to spend good money for a single-family residence.

A DSCR loan can be used on short and long-term rentals, so Virginia investors have their choice of rental properties that can help generate excellent rental income.

Why Investors Want a Virginia DSCR Loan

DSCR loans in Virginia are more streamlined and easier to qualify for than conventional loans. They only require a minimum credit score of around 640 and an estimated or current minimum DSCR of 1.25x; in other words, if your rental properties can generate enough cash flow to cover your loan payment, it's highly likely that you'll qualify for the financing you need.

The Virginia DSCR loan process is far simpler than other loan types, which is why it's so well respected by investors. To secure a conventional loan, lenders have strict regulations regarding personal income verification. Since many investors have complicated income streams and tax returns, gathering the necessary documents can be a hassle; many borrowers, like self-employed workers, may not even qualify due to these stipulations.

Instead, DSCR lenders use a property's potential cash flow by estimating rental income and debt expenses like insurance to calculate eligibility— previous successful property management is a plus. A higher DSCR can lead to better loan terms like the minimum monthly payment.

A DSCR lender can also offer higher loan amounts than traditional mortgages. The extended loan period also offers lower payments, helping investors improve their DSCR even as they reinvest the cash. It's clear that Virginia DSCR loans are a winning choice for those seeking to boost their cash flow through rental property.

How is DSCR Calculated?

The debt service coverage ratio takes a property's income and divides it by annual debts. If you already have investment properties, you can use your current DSCR to apply. If this is your first investment loan, the lender will estimate DSCR based on the local market.





The Current Rental Market in Virginia

The median rent in Virginia is $1,978, but looking at the whole state doesn't provide data accurate enough for investors to estimate potential DSCR. Instead, borrowers should look at the median rent and selling price for the city in which they wish to invest.

Virginia has a high percentage of renters, with some neighborhoods seeing renters account for up to 60% of households in 2020.

The Top 5 Options for Virginia DSCR Loan Investment Property

With many popular (and populated) cities across Virginia, it can be difficult to decide where to invest. Clever has analyzed investment markets across the state to pick the five best cities for investment:

  • Lynchburg
  • Richmond
  • Charlottesville
  • Blacksburg
  • Bristol
These places are rich in opportunities for great rental property purchases, and a Virginia DSCR loan can make this possible faster than you imagined.



How Tourism Affects Virginia's Economy

A strong tourism industry bolsters the state economy and leads to higher rental demand, from vacation rentals to businesses renting more office space for new jobs.

2022 saw domestic tourists spend $30.3 Billion in Virginia. This number was 4.4% higher than the year prior to the pandemic.

Virginia capitalized on funds from the American Rescue Plan Act to expand their advertisements, drawing in 15 million more households than in 2021. With these numbers, Virginia has easily re-established itself as a premier travel destination.


Closed DSCR Loans Virginia

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


Richmond LTR


Richmond, VA

  • $275,250 Loan Amount
  • Cash-Out Refinance
  • LTR 
  • DSCR: 1.04
Charlottesville LTR


Charlottesville, VA

  • $224,000 Loan Amount
  • Cash-Out Refinance
  • LTR
  • DSCR: 1.28
Virginia Beach STR


Virginia Beach, VA

  • $883,500 Loan Amount
  • Cash-Out Refinance
  • STR
  • DSCR: 1.53

DSCR Loan | Virginia FAQ

The maximum DSCR loan available will depend on the borrower, mortgage lender, and property. The highest DSCR loans on record reached up to $5 million, but they're rare.


Hard money loans are short-term funding to secure or purchase an asset. However, DSCR loans can refinance hard money loans for investment properties.



Since DSCR loans and lenders focus on rental income over personal income, clients do not need to provide income verification like W2s, bank statements, or similar documentation to qualify for loans.


Borrowers can take an objective look at their own financial situation and compare mortgage strategies, but the more efficient way to be certain is to speak with a DSCR lender, like the experts at Visio Lending. Let them walk you through the data and help you select the best investment option.

Many factors go into determining eligibility for a DSCR loan, including the region the property is in. How hard qualification is depends on local mortgage rates and loan options.

If you have doubts about whether you qualify for a loan in your desired investment area, you can call lenders to discuss the local markets and decide the best path forward. We're happy to explain DSCR loans in Virginia, helping you determine whether they're right for you.

Any income-producing property is generally eligible for a DSCR loan, which includes:

  • Single-family rentals
  • Multifamily rentals
  • Condominiums and townhouses
  • Retail spaces
  • Industrial buildings
  • Office buildings

DSCR Landing Page bottom grpahic (41)-1

Our DSCR Loans in Virginia 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