DSCR Loan Maryland
- LTV: 80%
- Term: 30 Year
- Rate: 7.25%
- Points: 1.5%
What are DSCR Loans used for in Maryland?
1. Baltimore
2. Bethesda
What are dscr loans used for in maryland?
DSCR loans are a powerful financing tool for real estate investors in Maryland, allowing them to qualify for loans based on the rental income potential of the property rather than personal income.
These loans use the Debt Service Coverage Ratio (DSCR)—a calculation comparing rental income to property expenses to determine eligibility and loan amounts.
In Maryland, where rental demand is strong, DSCR loans are commonly used to finance long-term rental properties, short-term vacation rentals, and multi-unit buildings.
For those following the BRRRR investing strategy, DSCR loans are ideal for refinancing after stabilizing a property. This strategy allows investors to build a portfolio of rental properties while preserving capital for future projects.
If you're considering investing in Airbnb rentals, DSCR loans can also help finance short-term rentals in Maryland’s high-demand vacation markets in the greater DC Area. Learn more in our guide: Financing Airbnb Rentals with DSCR Loans.
To understand how to calculate DSCR and determine your eligibility, visit the How to Calculate DSCR section of this page.
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DSCR loans are a powerful financing tool for real estate investors in Maryland, allowing them to qualify for loans based on the rental income potential of the property rather than personal income.
These loans use the Debt Service Coverage Ratio (DSCR)—a calculation comparing rental income to property expenses to determine eligibility and loan amounts.
In Maryland, where rental demand is strong, DSCR loans are commonly used to finance long-term rental properties, short-term vacation rentals, and multi-unit buildings.
For those following the BRRRR investing strategy, DSCR loans are ideal for refinancing after stabilizing a property. This strategy allows investors to build a portfolio of rental properties while preserving capital for future projects.
If you're considering investing in Airbnb rentals, DSCR loans can also help finance short-term rentals in Maryland’s high-demand vacation markets in the greater DC Area. Learn more in our guide: Financing Airbnb Rentals with DSCR Loans.
To understand how to calculate DSCR and determine your eligibility, visit the How to Calculate DSCR section of this page.
Maryland DSCR Loan Products
Low Rates, from 1.0% Origination for long term & short term rentals in Maryland.
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Long Term Rental
DCSR Loans Maryland
Rates from 6.75%
LTV Up To 80%
From 1.0% Origination Points
Minimum DSCR: 1.0
Closing Time 14 Days
Appraisal Required
Minimum Credit Score: 660
Property Condition C4 Required
Purchase, Refinance, and Cash Out Available
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Short Term Rental
DCSR Loans Maryland
Rates from 6.95%
LTV Up To 80%
1-2% Origination Points
Minimum DSCR: 1.0
Closing Time 21 Days
Appraisal Required & AirDNA Check
Minimum Credit Score: 680
Property Condition C4 Required
Purchase, Refinance, Cash Out Available
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How To Determine DSCR For maryland Rental Properties?
The Debt Service Coverage Ratio (DSCR) is calculated by dividing the monthly rent of the property by the monthly loan payment (principal + Interest), taxes, insurance and association fees (PITIA).
DSCR = Rent/PITIA
The basis of a DSCR loan in Maryland, is that the rent you collect from tenants leasing the property should be greater than the cost to own and operate the property.
Investment purpose rental properties with a DSCR greater than 1.0 are called “cash flowing”. You can calculate the DSCR of your rental property with our DSCR Loan Calculator.
(DSCR Evaluation)
Property Value: $474,000
Loan: $379,200
Interest Rate: 7.25%
Ammortization: 30 YR (FRM)
Monthly Rent: $3,995
P&I Payment: $2,586.81
Monthly Taxes: $400.00
Monthly Insurance: $180
Monthly HOA: $0
DSCR 1.26
maryland DScr Loan process
Ridge Street closes Maryland DSCR loans in 14-21 days.
Apply Or Get Pre-Approved Online
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Receive your term sheet
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Submit Docs
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Appraisal or BPO
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Closing
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When To Use a DSCR Loan?
DSCR loans are used by investors to "hold" real estate. These loans are long term and amortizing. This allows investors to continuously gain equity in their property while generating monthly cashflow.
Investors either use DSCR loans when purchasing a property or when refinancing it. The BRRRR Investing Strategy is popular among investors in which the DSCR loan is used to "cash out" the property.
Benefits Of DSCR LoanS Compared To Other Loan Types
Other benefits of DSCR loans include:
- No income verification
- Can be used for long term and short term rentals (Financing Airbnb's for example)
- Cost Effective
Best Rental Markets In Maryland For DSCR Loans
Maryland offers a diverse rental property market, with strong opportunities in both its mid-sized cities and the high-demand suburbs surrounding Washington, D.C. Investors can find solid rental economics in areas like Baltimore, which provides affordability and strong rental yields, as well as in upscale suburban markets such as Bethesda, where high-income tenants drive rental demand. Beyond these, mid-sized towns like Germantown and Columbia offer a balance of affordability, strong job markets, and consistent tenant demand, making Maryland an attractive state for DSCR loan-financed rental investments.
Baltimore
Baltimore offers strong cash flow opportunities, especially in areas like Federal Hill, Canton, and Fells Point, where rental demand is high. However, investors should avoid high-crime areas, as tenant quality and property values can be challenging. With relatively low property prices and strong rental yields, investors can leverage DSCR loans to finance cash-flowing properties without income verification. Suburban areas like Towson and Pikesville also provide stable rental markets with lower risk, making them attractive options for long-term investors.
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Bathesda
Bethesda is one of Maryland’s most desirable rental markets, offering high property values, strong tenant demand, and proximity to Washington, D.C. With a strong job market driven by government agencies, biotech firms, and healthcare institutions, the area attracts high-income renters seeking quality housing. While property prices are higher than in other Maryland markets, investors can leverage DSCR loans to acquire rental properties with strong cash flow potential. Rental demand remains steady, particularly for upscale apartments and single-family homes, making Bethesda a strong choice for long-term appreciation and stable returns.
gERMANTOWN
Germantown offers a balanced rental market with affordable property prices, strong tenant demand, and a growing suburban economy. With its proximity to Washington, D.C., and major employers in biotech and government contracting, the area attracts a mix of professionals and families. Investors can leverage DSCR loans to acquire rental properties with solid cash flow potential, as rental demand remains steady for both single-family homes and multifamily units. Germantown’s strong schools, retail centers, and access to public transit make it a desirable location for long-term renters, providing stability for investors seeking consistent returns.
MARYLAND DSCR Loan FAQ’s
How can I Improve the DSCR of my property?
- Increase Your Down Payment. By Increasing your down payment your loan amount will go down and your DSCR will increase. If you’re struggling to improve your DSCR past 1.0, increasing your down payment is an option you may have to consider.
- Ask Your Lender About A Rate Buy Down. Some lenders, including Ridge Street, allow you to pay an additional fee at closing in exchange for a lower rate. In some cases, a rate buydown will allow you lower your DSCR without increasing your overall cash required to close.
- Push For Less Expensive Insurance. Ask your insurance broker if there is anything they can do to lower your policy fee. A lower insurance policy fee will increase your DSCR.
Could I use a DSCR loan if I have to renovate a property?
You can start by getting a short term fix and flip loan to renovate the property and then refinance the property with a DSCR loan. The strategy of buy, rehab, rent, refinance, and repeating is called The BRRRR Strategy.
Can I use a DSCR loan on a Vacation property?
Absolutely! This is one of the main use cases for a DSCR loan.
What loan amounts can I get for a DSCR loan?
Between $50K and $2M. As long as a the DSCR is greater than 1.0, Ridge Street will lend on it.
Are DSCR loans only for investment properties?
Yes. If you are buying a piece of real estate which you intend to live in, then you would not qualify for a DSCR loan.
For refinances and cash outs, does the property have to be rented?
The short answer is no. We understand that investors who fix and refinance properties intend to refinance as soon as possible after renovating a property.
This said, providing a DSCR loan on a rental property that is not rented is higher risk. We'll want to see that the market you are in is very "rentable" at the market rent for your property. We will not provide a DSCR loan on a rental property that has been listed for rent for 3 months with no bites, for example.
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How to Get A DSCR Loan In MARYLAND with Ridge Street?
Ridge Street is the #1 DSCR Rental Property Lender in Maryland. We pride ourselves on fast closings and fairly priced loans. Get approved for your next project today.
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