Waco has two rental engines, Baylor University and a tourism boom that took off with Magnolia Market. Neither produces many $1.5M single properties, so jumbo loans here usually refinance groups of rentals.
In short: LendingStreet offers jumbo DSCR loans, about $1.5M to $5M+, to investors in Waco, Woodway, Hewitt, Robinson and the rest of McLennan County, qualified on rent rather than tax returns. In this market a jumbo balance usually finances a portfolio of homes and duplexes, a few 5-8 unit buildings near Baylor, or occasionally a large home in Castle Heights or Woodway. Texas property taxes without homestead exemptions are the line to model most carefully.
The blocks around Baylor University have houses, duplexes and small buildings that lease to students. Castle Heights and Sanger Heights have older, larger homes, and downtown and the Magnolia area draw visitors who fill short-term rentals.
Woodway, Hewitt and Robinson have newer family homes, and China Spring and Lorena are growing. Lake Waco and the Brazos River give some properties water frontage.
| Area type | Examples | What a jumbo loan usually covers | Check first |
|---|---|---|---|
| Near Baylor | University area, Speight and South 5th corridors | Student houses, duplexes, 5-8 unit buildings | Occupancy limits, lease timing |
| Established neighborhoods | Castle Heights, Sanger Heights | Larger homes, occasional executive lease | Older systems, rent support |
| Suburbs | Woodway, Hewitt, Robinson, China Spring | Portfolios of newer homes | HOA rules, school district taxes |
Most Waco rentals are priced far below jumbo size, so reaching $1.5M typically takes a dozen or more properties under a blanket loan, or a few student buildings near campus. Rent-to-price ratios are reasonable, but the Texas tax line takes a big share of rent.
Student rentals can earn strong rent per bedroom with academic-year leases. Lenders will look at signed leases, summer vacancy and how close the property is to campus. Leases signed by parents or with co-signers are common and help document the rent.
Texas relies on local property taxes, and a Waco property is taxed by the county, the city, the school district and other units. Homestead exemptions and the homestead appraisal cap apply only to primary residences, so investors pay on full appraised value and the seller's bill can be much lower than yours.
Look up every taxing unit on the McLennan County Appraisal District record and budget on the full combined rate. Texas has no transfer tax, which keeps closing costs down.
This example is illustrative and not a quote. An investor owns 12 single-family homes and duplexes across Waco, Hewitt and Robinson with a combined value of $2,200,000. Combined rent is $21,000 a month. Taxes without homestead exemptions total $4,050 a month, and insurance is $1,300.
The loan works out to $1,540,000 at 70% LTV, with estimated principal and interest of about $10,246. With $4,050 in taxes and $1,300 in insurance, the full monthly payment is about $15,596. Against $21,000 of combined monthly rent, DSCR is about 1.35x.
Taxes are more than a quarter of the payment, but the portfolio still clears the 1.0x standard with a good margin. A blanket loan like this also carries release provisions, so selling one duplex later does not mean refinancing the other eleven properties.
| Line item | Portfolio refinance |
|---|---|
| Value | $2,200,000 |
| Loan-to-value | 70% |
| Loan amount | $1,540,000 |
| Estimated principal and interest | $10,246 |
| Property taxes | $4,050 |
| Insurance | $1,300 |
| Total monthly payment | $15,596 |
| Combined monthly rent | $21,000 |
| DSCR | About 1.35x |
Waco requires permits for short-term rentals, with different rules for owner-occupied and non-owner-occupied properties and limits in some residential zones. Tourism demand is real, but confirm the permit for the address before counting on nightly income.
Central Texas sees hail and severe storms, and many policies carry percentage-based wind and hail deductibles. Properties near the Brazos and Bosque rivers and Lake Waco can sit in mapped flood zones.
A jumbo DSCR file in the Waco area is still a rent-based loan. There is no stated maximum, no tax returns, a 620 credit floor and LLC ownership is normal. Expect closer attention to the appraisal, the rent support and your liquidity, because one large property carries more risk than a small one.
In practice that means leverage that can sit below the program maximums, more months of reserves, and sometimes a second valuation. These limits vary by program. If the ratio comes in under 1.0x at the leverage you want, a sub-1.0 DSCR program or a lower loan amount are the usual fixes. Pricing on large balances is set case by case, after the appraisal and rent review.
Sometimes splitting the debt works better. Separate DSCR loans on each property keep each one independent, while a blanket loan on five or more Waco rentals gives one payment and one closing, with release clauses so you can sell a property without refinancing the rest.
For a single large rental you already own, compare a cash-out refinance, capped at 75% LTV on standard programs, with a rate-and-term refinance. Each changes the payment, and the payment is what drives the ratio. Run both through the DSCR calculator before you choose.
Lenders move faster on jumbo files that arrive complete. Pull these together before you request terms:
Get a quote through the form below or call (877) 298-1001. We size the loan at more than one LTV so you can see the tradeoff between cash in and coverage. Our investor loans are business-purpose loans on non-owner-occupied property. Our Texas jumbo DSCR page covers the statewide picture.
Yes, usually as a portfolio or a few student buildings. Single properties here rarely reach jumbo size.
Sellers who lived in the home had homestead exemptions and a capped appraisal. Investors pay on full value.
Yes, with signed leases. Lenders consider summer vacancy and occupancy limits on unrelated tenants.
Possibly. Waco requires STR permits with rules that differ by zone and occupancy. Check before you buy.
Yes. LLC borrowers are standard. You will usually sign for the loan personally as well, and the lender will review the operating agreement and ownership. Multi-member LLCs may need each major owner to sign.
Yes. Cash-out goes up to 75% LTV on standard programs, often lower on large balances, and the rent must cover the new payment. Seasoning varies by program, and some programs cap the loan at cost plus documented improvements early on.
No. A DSCR loan qualifies on the property's rent compared with the full monthly payment. You need a credit score of 620 or higher, reserves and entity documents if you buy in an LLC. Lenders also review the appraisal and rent support closely on large balances.
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