Dallas rentals bought before the 2021 to 2022 price jump often carry a lot of equity. The catch is Texas property tax: on a rental, the tax bill can be the biggest line in the payment after principal and interest, and it is often what decides how much cash you can take out.
In short: Yes. LendingStreet finances DSCR cash-out refinances on Dallas-area rentals up to 75% LTV, qualifying on the property's rent with no W-2s or tax returns. The rent has to cover the full payment, including Dallas County or Collin County taxes and a hail-heavy insurance premium, at the program minimum of 1.0x on standard programs. In Dallas, many investors end up a little under 75% because of the tax line, and the example below shows why.
Prices across Dallas-Fort Worth rose quickly in 2021 and 2022, then flattened as rates climbed and new construction, especially in the northern and eastern suburbs, added supply. Many neighborhoods are roughly where they were a couple of years ago, with some softening in areas with a lot of new building.
If you bought before 2021, you likely have room to refinance. If you bought at the peak, the appraisal may land close to what you paid. Check recent sales of similar homes on your street before ordering anything.
Texas has no state income tax, so local governments lean on property tax. Combined rates in Dallas, including the city, county, school district, community college and hospital district, are high by national standards, and investors do not get the homestead exemption or the homestead cap on appraisal increases. Each year the appraisal district can raise a rental's value to market.
On a DSCR loan, the monthly tax escrow sits inside the payment. A $360,000 rental can easily carry a tax bill of several hundred dollars a month, which can be more than the insurance and HOA combined. Protesting the appraised value with the Dallas Central Appraisal District, or Collin, Denton or Tarrant if the property is there, can directly improve your ratio.
Texas has well-known constitutional rules for home equity loans, including an 80% cap and a waiting period. Those rules are written for homesteads. A non-homestead rental held by an investor or an LLC is generally outside them, which is why a DSCR cash-out can go to 75% LTV. The title company will confirm the property is not claimed as a homestead.
Texas does not charge a state mortgage recording tax or a real estate transfer tax, so closing costs are mostly title, survey, escrow and lender fees.
North Texas is one of the most active hail regions in the country, and insurers price for it. Expect higher deductibles, roof age questions and sometimes separate wind and hail deductibles. A newer impact-resistant roof can make a real difference to the quote.
Get a current landlord policy quote before you apply. A premium that is a couple of hundred dollars a month higher than you assumed can move the DSCR enough to change the loan amount.
This example is illustrative and not a quote. An investor owns a three-bedroom house in East Dallas appraised at $360,000, owing $170,000. It leases for $2,700 a month. Taxes are about $690 a month and insurance about $215.
At 75% LTV the loan would be $270,000, with principal and interest of about $1,842. The full payment is about $2,747, so the DSCR is about 0.98x, just under 1.0x. Dropping to 70% LTV brings the loan to $252,000, the payment to about $2,624 and the DSCR to about 1.03x. That still returns $82,000 before closing costs. A successful tax protest or a sub-1.0 program could close the gap at the higher amount.
| Item | At 75% LTV | At 70% LTV |
|---|---|---|
| Appraised value | $360,000 | $360,000 |
| Loan amount | $270,000 | $252,000 |
| Existing loan payoff | $170,000 | $170,000 |
| Cash before closing costs | $100,000 | $82,000 |
| Principal and interest (30 years) | About $1,842 | About $1,719 |
| Taxes and insurance (monthly) | $905 | $905 |
| Total monthly payment | About $2,747 | About $2,624 |
| DSCR at $2,700 rent | About 0.98x | About 1.03x |
Investors hold a lot of older single-family homes in Oak Cliff, Pleasant Grove, East Dallas, Lake Highlands and the Love Field area, plus newer homes in suburbs like Garland, Mesquite, Grand Prairie, Lancaster and Rowlett. Duplexes and small fourplexes show up in older parts of Oak Cliff and East Dallas.
Suburban subdivisions may sit inside a municipal utility district or public improvement district, which adds a separate assessment to the tax bill. Check for it before you underwrite the deal. For 5 to 8 unit buildings, max LTV can be lower and varies by program.
The City of Dallas adopted zoning rules in 2023 that limit short-term rentals in single-family areas, and those rules have been tied up in litigation. Suburbs set their own rules. If you plan to qualify on nightly income, confirm the current status with the city before relying on it. Most Dallas cash-outs we see are on long-term leases.
Common uses include paying off a fix-and-flip loan after the rehab is leased, funding the next purchase, replacing a hail-damaged roof or buying out a partner. Some investors also use a cash-out to build reserves ahead of a large tax bill. Whatever the use, plan for the tax escrow the new loan will collect at closing, which can be a sizable amount if the closing falls just before taxes are due in January.
Yes. We finance DSCR cash-out refinances on non-owner-occupied rentals across Dallas and its suburbs, up to 75% LTV, starting at $150,000.
They are written for homesteads. A non-homestead investment property is generally outside them, which allows up to 75% LTV on a DSCR cash-out. The title company confirms homestead status.
Usually because of property tax. The full tax escrow counts in the payment, and Texas rates are high, so the ratio can fall below 1.0x at the maximum loan.
It can. A lower appraised value for tax purposes lowers the tax line, which raises the DSCR. The appraisal for the loan is a separate valuation.
Texas has no state real estate transfer tax or mortgage recording tax. Closing costs are mainly title, escrow, survey and lender fees.
Possibly, but Dallas's STR zoning rules have been changing. Confirm the property can legally operate before qualifying on nightly income.
It varies by program. Some allow cash-out soon after purchase; others require several months of ownership or limit the loan to cost plus improvements.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.