DSCR loans in Texas — what actually changes?

THE NUMBERS

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

What does it cost to close in Texas?

Very little in tax terms. Texas imposes no state real estate transfer tax and no tax on the mortgage or note, so beyond county recording fees, title premiums and the usual escrows, the closing table is light compared with Florida, Tennessee or Pennsylvania. Texas closings are run by title companies rather than attorneys as a matter of custom, and title insurance premiums are promulgated at the state level rather than negotiated. Your title company's fee sheet is the authority on the exact numbers for your county.

Why do Texas property taxes decide Texas deals?

With no state income tax, Texas school districts, counties and cities are funded largely by property tax, and effective rates sit near the top of the national table. On a rental, the homestead protections that soften the bill for owner-occupants do not apply, so an investor's tax line is the unsoftened one. The desk underwrites the appraisal-district value and the current combined rate rather than the seller's number, and on a recently sold property expects the assessment to move toward the sale price. Half the Texas files that fail DSCR fail on the T.

How fast is Texas foreclosure, and does it price better?

Texas is a deed-of-trust state where a trustee can sell non-judicially, with the sale held on the first Tuesday of the month after statutory notice of at least 21 days. It is one of the fastest remedies in the country, which is part of why almost every DSCR lender is comfortable here. Silt does not price a discount for it — the grid is national — but it does mean Texas rarely sits on a lender's restricted list, so you should expect competitive terms rather than exceptions.

What about windstorm and flood insurance on the coast?

Along the seacoast counties, wind and hail is often excluded from the standard policy and written separately, with the Texas Windstorm Insurance Association acting as the residual market created by the legislature for that territory. Inland Texas is ordinary landlord insurance. Hail deductibles in North Texas deserve a read, and post-Harvey flood mapping matters well beyond the shoreline in the Houston basin. Get a real binder early on any coastal file: an assumed premium is the second most common reason a Texas DSCR moves after underwriting.

Do I need a Texas LLC, and what about leases?

No, but a foreign entity that transacts business in Texas must register with the Secretary of State, and title companies will ask for the registration and a certificate of good standing. Registering during underwriting does not slow pricing. Lease terms are conventional twelve-month agreements in most metros, and security-deposit handling is governed by state law — pattern-level context only, and your attorney should review your form lease. Austin, Dallas and San Antonio each regulate short-term rentals separately; check the ordinance before underwriting nightly revenue.

Which Texas markets do investors bring us?

Dallas–Fort Worth carries the deepest rental demand and the widest spread between suburbs, so the tax rate by district often matters more than the metro. Houston offers the strongest rent-to-price posture of the big four, with flood-zone diligence as the price of entry. San Antonio prices lower per door with steady military and medical demand. Austin has the state's tightest yields and its most active short-term rental rulemaking. El Paso and the Rio Grande Valley remain small-ticket cash-flow markets. Qualitative posture, not a forecast.

Worked example — a Houston-area single-family rental

Illustrative only, from published program floors — not a quote, an approval, or a commitment to lend. The 2.2% combined rate is an assumption for the illustration, not a published figure: pull the actual rate from the appraisal district. At 1.12 this file prices at +25 bps under the DSCR band rather than earning the ≥1.25 credit — a Texas-typical outcome driven entirely by the tax line.

WHAT WE NEED FROM YOU

• Entity documents — articles or certificate of formation, operating agreement, EIN letter. Every Silt loan closes in an LLC or corporation, never a personal name.
• Leases or a rent roll — current leases where the units are occupied; on a vacant unit the appraiser's rent schedule (Form 1007) carries the income.
• Insurance — a binder naming the borrowing entity, with the lender's mortgagee clause.
• Bank statements — two months, showing reserves and the source of the down payment.
• Contract or payoff — the purchase contract if buying, the payoff statement if refinancing.
• Texas add-on — the appraisal district record and the combined rate for the taxing units, so the tax line is underwritten post-sale rather than at the seller's bill.
• Texas add-on — a windstorm binder or TWIA declaration on any seacoast property, and a flood determination in the Houston basin.

FREQUENT QUESTIONS

Does Silt lend in Texas?

Yes, statewide, on the same programs and the same pricing grid as the rest of the 42-state footprint.

Is there a transfer tax in Texas?

No state real estate transfer tax and no state tax on the note. County recording fees and title premiums still apply.

Will high property taxes stop my file?

Not by themselves, but they lower DSCR. The levers are more equity, a rate buy-down at 0.25 points per 25 basis points, or interest-only at +25 basis points.

Do I need to be a US citizen?

No. Silt lends to US citizens, permanent residents, non-permanent residents and foreign nationals; foreign-national files cap at 70% LTV and price 75 basis points higher.

Will you pull my credit to quote?

No. Quoting is free and takes no credit pull. Credit is pulled only when you want a written term sheet, and it sets the pricing tier.

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