A DSCR loan qualifies a rental on its own income. The lender divides the monthly rent by the full monthly payment, principal, interest, taxes, insurance and any HOA, and if the ratio clears the bar the loan works. Your personal income and tax returns never enter it. Below is what that looks like in Hawaii using the latest Census figures, so you can see where deals pencil before you make an offer.
The Hawaii rental market by the numbers
| Hawaii | United States | |
|---|---|---|
| Median monthly rent | $1,971 | $1,413 |
| Median home value | $839,100 | $332,700 |
| Median property tax (owner occupied) | $2,239/yr | $3,119/yr |
| Effective property tax rate | 0.27% | 0.94% |
| Households that rent | 37% | 35% |
| Gross rent yield (annual rent / value) | 2.8% | 5.1% |
Hawaii's gross rent yield of 2.8% is below the national 5.1%, and its effective property tax rate of 0.27% is below the national 0.94%. About 37% of households rent.
A DSCR loan at the Hawaii median
Take a rental bought at the median value of $839,100 with 25% down, a 7.0% rate on a 30 year schedule, the median property tax, and insurance estimated at 0.6% of value a year:
- Loan amount: $629,325
- Principal and interest: $4,187 a month
- Taxes and insurance: $606 a month
- Total payment (PITIA): $4,793
- Median rent: $1,971
- DSCR: 0.41
That ratio is well below 1.00, so a typical house at the typical rent is far from covering its payment with 25% down. At Hawaii's median rent, a purchase price up to about $344,896 keeps the ratio at 1.00 with 25% down, and up to about $275,917 keeps it at 1.25. To reach 1.00 at the median price you would need roughly 76% down.
Medians blend every kind of home and rental together, so treat this as a starting point. A three bedroom house usually rents well above the median gross rent, which includes small apartments. Run this deal in the DSCR calculator and change any number to match the property you are looking at.
Property taxes and insurance in Hawaii
The tax figure above is the median paid by owner occupants, and investors often pay more because a rental usually does not get the homestead exemptions owners do. On a DSCR loan, taxes and insurance sit inside the payment, so every extra dollar there lowers your ratio. Pull the actual tax bill the property will carry after the sale, and get a real insurance quote, before you lock in an offer.
How we lend in Hawaii
We make DSCR loans on rentals in Hawaii and in 42 states plus Washington DC. The program:
- Up to 80% of the property's value
- Qualifies on the rent, with no tax returns, W-2s or pay stubs
- 620 minimum credit score
- Single family and 2 to 4 unit rentals on long term leases
- Closes in an LLC
- 30 year fixed options and step down prepayment choices
- Closings in about 21 to 30 days once conditions are met
Buying a property that needs work first? A rehab loan covers the purchase and the renovation, and the DSCR loan refinances it once it is leased. See the full DSCR loan requirements or send us the deal for terms.
Frequently asked questions
Can I get a DSCR loan in Hawaii?
Yes. We make DSCR loans on 1 to 4 unit rentals in Hawaii on long term leases, closed in an LLC, with a 620 minimum credit score and up to 80% of the property's value.
What DSCR do lenders want in Hawaii?
Most DSCR programs want at least 1.00, and the best pricing usually starts around 1.20 to 1.25. At Hawaii's median rent and home value with 25% down, the ratio works out to about 0.41.
Are short term rentals in Hawaii eligible?
Not on our DSCR program. We lend on properties with long term leases. Airbnb and other rentals under 30 days are not eligible.
How do Hawaii property taxes affect a DSCR loan?
Taxes are part of the payment the lender divides the rent by, so a higher tax bill lowers the ratio. Hawaii's owner occupied median is $2,239 a year, about 0.27% of value, and rentals often pay more.
Market figures: U.S. Census Bureau, American Community Survey 2024 5 year estimates. The example uses a 7.0% rate, 25% down and insurance at 0.6% of value for illustration only. It is not a loan offer.