Why does the state change a DSCR deal?

THE NUMBERS

ILLUSTRATIVE — published program floors, not a quote or a commitment to lend. Subject to underwriting, appraisal and final credit approval.

What actually stays the same from state to state?

The underwrite itself. Silt applies the same minimum 0.75 DSCR, the same 80% maximum LTV on a purchase or rate-and-term refinance and 75% on a cash-out, the same 660 FICO floor, the same six months of PITIA in reserve, and the same national pricing grid whether the property sits in Philadelphia or Fort Worth. The desk does not add basis points for a judicial-foreclosure state, and it does not trim leverage for a coastal county. That consistency is deliberate: it means the variation you see between states is coming from the property and the jurisdiction, not from Silt marking up the loan.

What does the closing table cost, and who runs it?

Transfer and mortgage-recording taxes differ enormously and land on different parties. Texas charges no state transfer tax and no tax on the note at all; Pennsylvania charges 1% to the Commonwealth plus a local rate that is materially higher in Philadelphia and Pittsburgh; Florida taxes the deed, the note and the mortgage separately through documentary stamps and a 2-mill intangible tax; Tennessee taxes both the deed and, unusually, the debt itself through its indebtedness tax; New Jersey imposes its Realty Transfer Fee on the seller, with a supplemental fee on transfers over $1 million. Closing custom differs too — New Jersey runs attorney-supervised closings with a three-day attorney review period on residential contracts, while Texas and most of Florida close through title companies as a matter of course. None of this changes the loan, but it changes your cash to close and, in Tennessee's case, a cost that recurs every time you refinance the same property.

How does insurance move the DSCR?

Insurance sits inside PITIA as a hard monthly cost, and the market for it varies sharply by geography. Florida's wind exposure often forces coverage through the state-backed Citizens Property Insurance and separate wind and flood policies, with older roofs requiring four-point and roof inspections before a carrier will bind. Texas relies on the Texas Windstorm Insurance Association along its seacoast counties and on ordinary hail deductibles inland. Tennessee and Pennsylvania carry no comparable coastal exposure, so a landlord policy there is closer to a flat, predictable line. Because DSCR is rent divided by PITIA, a state where the insurance line runs two or three times higher for a comparable property needs correspondingly more rent, or less leverage, to clear the same threshold.

Does the property tax bill change when you buy?

In several states, yes, and the difference between the seller's bill and the buyer's real bill is the single most common reason a file that looked strong on paper prices worse once underwritten. Florida's Save Our Homes cap protects only homesteaded owners and resets on a change of ownership; non-homestead assessments are capped at 10% a year but still reset the base. New Jersey towns revalue on their own schedules, and its effective rates are the highest in the country. Pennsylvania counties can go a decade or more between reassessments, so the common level ratio published each year matters more than the sticker bill. Texas has no homestead protection to soften an investor's bill in the first place, and rates there sit near the top of the national table regardless of a sale. Silt underwrites the likely post-sale tax figure, not the seller's number, precisely because that gap is where DSCR gets flattered on paper and disappointed on the settlement statement.

How do licensing and landlord-tenant law change the rent you can rely on?

Short-term rental legality is set locally almost everywhere, and it decides whether nightly revenue can be underwritten at all. Nashville runs an active Metro permit system that distinguishes owner-occupied from non-owner-occupied listings; Miami Beach enforces minimum-stay rules aggressively; Austin, Dallas and San Antonio each set their own ordinances; and Philadelphia and Pittsburgh run their own permit regimes on top of Pennsylvania's silence on the subject at state level. Where the ordinance or the HOA does not clearly allow the use, the desk underwrites long-term market rent instead of nightly income, which can materially change the top line of the ratio. Landlord-tenant protections — notice periods, cause for eviction, deposit handling — vary by state and are read into how confidently a lease supports the rent figure, though none of that is legal advice and your attorney should review any specific lease or tenancy.

So what should an investor actually do differently by state?

Price the jurisdiction before you price the loan. Pull a forward property tax estimate rather than trusting the seller's bill, get a bound insurance quote rather than an assumed premium — especially in Florida and coastal Texas — and confirm the transfer and mortgage taxes with your title company or closing attorney so they are in your cash-to-close model from the first call, not a surprise on the settlement statement. If short-term rental income is part of the plan, read the local ordinance and the HOA covenants before you build a nightly-rate proforma around them. None of this changes what Silt will lend against a given DSCR; it changes what DSCR the property will actually produce once the state's real costs are in the fraction.

The same $300,000 rental, Texas vs New Jersey

Illustrative only, built from the published program floors and the state facts on Silt's Texas and New Jersey pages — not a quote, an approval or a commitment to lend. Both files land in the 1.00–1.19 band and price at +25 basis points; the point is that neither the loan nor the grid moved, only the inputs did.

WHAT WE NEED FROM YOU

• Forward tax estimate. The assessor's or appraisal district's record, not the seller's current bill, wherever the state reassesses on sale.
• Bound insurance quote. A real binder naming the entity, including wind or flood where the map or the coast calls for it.
• Title or closing attorney fee sheet. The exact transfer tax, mortgage-recording tax and closing-agent structure for your state and county.
• Entity registration. Evidence of foreign-entity registration and good standing where your LLC was formed outside the property's state.
• Local ordinance or permit. The short-term rental permit or ordinance section if any part of the file depends on nightly revenue.

FREQUENT QUESTIONS

Does Silt's rate or leverage change by state?

No. The DSCR floor, the LTV caps, the FICO floor and the pricing grid are national. What varies by state is the tax, insurance and reassessment picture that feeds the PITIA the grid is applied to.

Which states tax the loan itself, not just the sale?

Florida and Tennessee both do. Florida charges documentary stamp tax on the note and a nonrecurring intangible tax on the mortgage; Tennessee charges an indebtedness tax on the recorded debt. Texas, Pennsylvania and New Jersey do not tax the note.

Why does my property tax bill jump after I buy?

In states such as Florida, New Jersey and parts of Pennsylvania, the seller's assessment does not travel with the property — a sale, a change of use, or a scheduled county revaluation can reset it. Silt underwrites the likely post-sale figure rather than the seller's bill.

Can I underwrite Airbnb income anywhere?

Only where the local ordinance and any HOA covenant clearly permit non-owner-occupied short-term use. Where they don't, the desk uses long-term market rent instead, at the standard 37.5 basis point premium that applies to documented short-term rental files where the use is confirmed.

Do I need an LLC formed in the property's own state?

No, but an out-of-state LLC doing business in most of these states must register as a foreign entity and stay in good standing, and title companies will ask for that evidence before closing.

RELATED

TERMS IN THIS LESSON

IN THIS COURSE

1. 9.1Why the state changes the deal
2. 9.2Pennsylvania
3. 9.3Tennessee
4. 9.4Texas
5. 9.5Florida
6. 9.6New Jersey