Kentucky's largest rental markets, Louisville and Lexington, both tightened rules on non-owner-occupied short-term rentals in residential zones. That pushes most high-value Kentucky rentals toward long-term leases, and the DSCR math has to work on that basis.
In short: LendingStreet's jumbo DSCR loans cover about $1.5M to $5M+ on Kentucky investment properties of 1 to 8 units, and they qualify on rental income rather than W-2s or tax returns. In Kentucky, jumbo balances usually come from Louisville's Highlands, Cherokee Triangle and eastern suburbs, Lexington's Chevy Chase and horse-country homes, Northern Kentucky near Cincinnati, Lake Cumberland homes, and portfolios or 5-8 unit buildings. Property is assessed at full value and both big cities regulate short-term rentals.
In Louisville, the Highlands, Cherokee Triangle, Crescent Hill and Old Louisville have historic homes and small multi-unit buildings, and Anchorage, Prospect, Indian Hills and the east end have larger homes leasing to healthcare and corporate employees.
Lexington's Chevy Chase, Ashland Park and the Hamburg area have higher-value rentals, and horse farms and estates in the surrounding Bluegrass counties occasionally lease long term. Fort Thomas and Covington in Northern Kentucky serve Cincinnati commuters, and Lake Cumberland has lake homes rented in summer.
| Area | What a jumbo balance usually buys | Main underwriting issue |
|---|---|---|
| Louisville east end and Highlands | Large home or small multi-unit building | Rental registry, older systems |
| Lexington | Higher-value home on a 12-month lease | STR rules, comparable leases |
| Northern Kentucky | 5-8 unit building or portfolio | Combined rent, hillside homes |
| Lake Cumberland | Lake home rented in summer | Seasonal revenue, dock coverage |
Kentucky home values are moderate, and single rentals that support $1.5M+ are limited to a few Louisville and Lexington neighborhoods and some lake and estate properties. More often, a jumbo balance means a 5-8 unit building or a group of rentals.
Bourbon tourism and university demand support rental markets in Louisville, Lexington and Bardstown, but leverage on top-end homes is usually moderate.
Kentucky assesses real property at its full fair cash value, then applies state, county, city and school rates. The homestead exemption is limited to owners who are 65 or older or disabled, so there is usually little difference between an owner's bill and an investor's, but a sale can trigger a reassessment to the purchase price.
Kentucky charges a transfer tax of $0.50 per $500 of value. It is customarily paid by the seller, though contracts vary.
The Ohio River and its tributaries have mapped flood zones in Louisville and Northern Kentucky, and eastern Kentucky saw severe flooding in 2022. Western Kentucky was hit by a major tornado outbreak in 2021. Insurers look closely at flood zones, roof age and wind deductibles.
This example is illustrative and not a quote. An investor buys a home in Louisville's east end for $1,500,000 that leases for $8,700 a month. Taxes are budgeted at $1,250 a month and insurance at $450.
At 70% LTV the loan is $1,050,000 and estimated principal and interest is about $7,163, for a total monthly payment of about $8,863 and a DSCR of about 0.98x. At 60% LTV the loan is $900,000, estimated principal and interest is about $6,140, the payment is about $7,840 and DSCR is about 1.11x.
Because short-term rentals face limits in residential zones, the ratio here is built on a 12-month lease. If the PVA reassesses the home to the purchase price, the tax line could rise, so check the current assessment against your price.
| Item | 70% LTV | 60% LTV |
|---|---|---|
| Purchase price | $1,500,000 | $1,500,000 |
| Loan amount | $1,050,000 | $900,000 |
| Estimated principal and interest | $7,163 | $6,140 |
| Property taxes | $1,250 | $1,250 |
| Insurance | $450 | $450 |
| Total monthly payment | $8,863 | $7,840 |
| Monthly rent | $8,700 | $8,700 |
| DSCR | About 0.98x | About 1.11x |
Louisville requires short-term rentals to register and generally requires a conditional use permit for non-owner-occupied short-term rentals in residential zones. Lexington adopted similar rules for non-hosted rentals in residential areas. Louisville also requires long-term landlords to register their rentals. Confirm current rules before you buy.
Some programs qualify a short-term rental on projected revenue, which works best at Lake Cumberland or in areas zoned for it.
The test is simple: does the property's rent cover its payment? Lenders add principal, interest, taxes, insurance and HOA dues, divide the rent by that total and generally want 1.0x or more. Some programs accept a ratio under 1.0x with other strengths in the file.
As the loan gets bigger, the file gets more scrutiny. Reserves are typically higher, appraisals are reviewed more closely and the highest LTVs are often reserved for smaller balances. Specific limits vary by program.
If one high-value property does not cover its payment at the leverage you want, there are other routes. Five or more rentals can go under one blanket portfolio loan, qualified on combined cash flow with one closing, one payment and release provisions when a property sells. A 5-8 unit building qualifies on the combined rent of every unit, with leverage that varies by program.
You can also bring more cash, take a smaller loan, or look at a sub-1.0 DSCR program. Buildings of 9 or more units are commercial; see our multifamily loans page for those.
Start with these items:
Our investor loans are business-purpose loans on non-owner-occupied property. Share the property details and your target leverage, and we will size the loan on realistic costs, show the ratio at a few loan amounts and lay out the options. Use the form below or call (877) 298-1001. For broader context, see our Kentucky DSCR loans page.
Kentucky's homestead exemption is limited to owners who are 65 or older or disabled, so most investors pay about what a typical owner would. A sale can reset the assessment.
In residential zones it generally needs a conditional use permit, and approval is not automatic. Check with Louisville Metro first.
It is $0.50 per $500 of value, usually paid by the seller.
Our DSCR programs have no stated maximum. Above about $1.5M, expect closer review, higher reserves and often a lower maximum LTV.
Yes. LLC borrowers are standard. You will usually sign for the loan personally as well, and we will ask for the LLC's formation documents.
Yes, with a cash-out refinance up to 75% LTV, frequently less on big loans. How long you must own the property first varies by program.
No. Our investor loans are business-purpose loans on non-owner-occupied property only.
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