Lexington, Kentucky home of the University of Kentucky, world‑renowned horse farms and a growing high‑tech and manufacturing sector presents unique opportunities for real estate investors. DSCR loans allow investors to leverage these opportunities without relying on personal income. Instead, lenders assess the property’s ability to generate enough rent to cover mortgage payments. By focusing on cash flow, DSCR loans enable self‑employed individuals, LLCs and portfolio investors to qualify for financing that might otherwise be out of reach.
The Lexington housing market balanced resilience and growth in 2025. Redfin data aggregated by Stacker shows a median sale price of $333,606, approximately 523 homes sold each month and 66 new construction sales. With an average inventory of 1,338 homes and just 2.6 months of supply, the market remains tight. Homes spent 42.2 days on the market, indicating relatively brisk turnover. On the rental side, RentCafe reports the average apartment rent was $1,349 in January 2026, with studios averaging $987, one‑bedrooms $1,145, two‑bedrooms $1,369 and three‑bedrooms $1,807. About 46 % of Lexington households are renter‑occupied, signalling robust demand for rental properties.
Lexington’s economy blends agriculture, education, manufacturing and technology. The City‑Data profile notes that horse breeding and equine tourism remain billion‑dollar industries, with more than 450 horse farms and major attractions like Keeneland Race Course and the Kentucky Horse Park drawing visitors. Agriculture extends beyond horses: the region produces burley tobacco, corn, soybeans, alfalfa and beef cattle, and exports more than $2.5 billion of goods annually including cars and printers. The University of Kentucky is one of the city’s largest employers and research hubs. Over the past two decades, Lexington has diversified toward manufacturing and high‑technology, attracting more than 100 major companies, including Toyota’s assembly plant employing around 7,500 workers and Lexmark International, a Fortune 500 company and one of Lexington’s largest employers. This diversified economy bolsters housing demand and offers investors a wide tenant base.
How DSCR loans work for rental and investment properties
A DSCR loan allows investors to qualify for a mortgage based on the subject property’s cash flow instead of their personal income. Lenders calculate the ratio by dividing the property’s gross rental income (or projected market rent) by the PITIAprincipal, interest, taxes, insurance and homeowner association fees. For example, a duplex in Lexington with $2,000 monthly rent and $1,500 monthly PITIA would have a DSCR of 1.33 ($2,000 ÷ $1,500). Most lenders want a DSCR of at least 1.0; some prefer 1.25 or higher but will go as low as 0.75 with larger down payments or reserve requirements.
Lexington investors should understand that DSCR loans only finance investment properties; owner‑occupied residences are ineligible. These loans can be used to purchase new rentals, refinance existing mortgages, or pull cash out for additional investments. Borrowers typically form an LLC to hold title, which also makes it easier to separate personal and business finances.
What investors should look for in a DSCR lender
When evaluating DSCR lenders in Lexington, consider:
- DSCR requirements – Determine the minimum ratio accepted and whether the lender offers no‑ratio programs. Lower DSCR thresholds may require higher reserves.
- LTV limits and down payment – Higher LTVs mean less cash out of pocket. Verify purchase and cash‑out LTVs separately.
- Interest rates and fees – Compare not just the note rate but also origination points, rate lock fees and potential prepayment penalties.
- Term options – Some lenders offer 30‑year fixed, while others provide 40‑year interest‑only or shorter fixed terms with ARMs. Choose a term that matches your investment horizon.
- Property eligibility – Check whether the lender finances short‑term rentals, mixed‑use buildings or properties outside city limits.
- Closing speed and local service – Local mortgage brokers or lenders familiar with Lexington may expedite appraisals and underwriting, helping you close quickly.
Top DSCR lenders in Lexington, KY
1. SelectHomeLoans.com – Top choice for Lexington investors
SelectHomeLoans.com remains our top pick across Kentucky. For Lexington investors, the company offers competitive DSCR loans tailored to both long‑term rentals and short‑term vacation rentals. Notable features include:
- Rates starting around the low‑6 % range, with options for 30‑year fixed, ARMs and interest‑only periods. SelectHomeLoans.com regularly beats national average DSCR rates thanks to efficient capital markets execution.
- LTVs up to 80 % for purchases and 75 % for cash‑outs, enabling investors to retain capital for renovations or additional acquisitions.
- DSCR minimum 0.8; borrowers can qualify with DSCRs below 1.0 if they provide additional down payment or reserves. The lender also offers no‑ratio DSCR loans for experienced investors.
- Credit score minimum of 640, with better pricing for scores over 700.
- Fast closings (often within three weeks) and streamlined documentation. Investors submit property rent rolls or market rent estimates along with basic personal identification.
- Broad property types, from single‑family homes to small multifamily (2–4 units), as well as short‑term rentals near the University of Kentucky or downtown Lexington. The company’s Kentucky team understands local regulations on Airbnb and can advise investors accordingly.
By blending flexible DSCR thresholds, solid LTVs and quick closings with a strong understanding of Lexington’s neighborhoods from the historic charm of Ashland Park to the student‑heavy neighborhoods around UKSelectHomeLoans.com earns the #1 ranking. Visit their website SelectHomeLoans.com Or Call them (888) 550-3296
2. Easy Street Capital
Easy Street Capital’s “EasyRent” program appeals to Lexington investors seeking high leverage and simplified underwriting:
- Rates starting around 5.75 % and up to 80 % LTV for purchases and refinances. Cash‑out refinances go up to 75 % LTV.
- No minimum DSCR requirement. While a higher DSCR will secure better pricing, Easy Street’s willingness to work with low ratios makes them attractive for properties in transition or needing improvements.
- Loan amounts from $150,000 to several million dollars, with recent closings in Lexington including $250,000 and $300,000 investment purchases at rates around 6.875 %.
- Property types: single‑family, duplex, triplex, four‑plex, townhomes and select small multifamily. Short‑term rentals are considered if there is proven or projected rental income.
- Minimal documentation on tax returns or W‑2s; investors provide a lease or market rent analysis and property insurance. Closing often takes three weeks.
Easy Street’s flexible DSCR requirement and willingness to finance smaller deals make them an excellent option for first‑time investors or those repositioning older properties.
3. Griffin Funding
Griffin Funding is well suited to Lexington investors who value competitive pricing and can meet moderate reserve requirements:
- DSCR requirement of 1.25 for best pricing, but they accept DSCR as low as 0.75 with 12 months reserves. A DSCR between 1.0 and 1.25 requires six months reserves.
- Down payments around 20–25 %; credit scores above 620. Loan amounts start at $100,000.
- Unlimited number of DSCR loans, though total debt and portfolio performance are reviewed.
- No personal income documentation; approval based on the property’s rental income. Standard closings are about 30 days.
Griffin Funding suits investors purchasing larger duplexes or triplexes who can meet the reserve requirement and want stable fixed rates.
4. LYNK Capital
LYNK Capital’s Kentucky program is designed for speed and simplicity:
- 30‑year rental loans with fixed or interest‑only terms. Rates start near 6 %.
- LTVs up to 80 %, using only the property DSCR for qualification; there is no personal DTI or tax return requirement.
- Quick closings often 21–30 days. Digital application and underwriting streamline the process.
- LYNK emphasises Lexington’s strong rental market anchored by the University of Kentucky, Toyota’s nearby plant and other manufacturing employers. The company’s underwriters are familiar with neighborhoods like Hamburg, Masterson Station Park and Lansdowne‑Merrick, helping investors set realistic rent projections.
LYNK is a good choice for investors who prioritise speed and a straightforward approval process.
5. Newfi Lending
Newfi is notable for offering DSCR as low as 0.8 and 15‑, 30‑ and 40‑year loan terms, including interest‑only options. Their program also features:
- Minimum credit score 640, making it accessible to a wide range of borrowers.
- Down payments starting at 20 %, with LTV up to 80 % on purchases.
- No personal income verification; qualification is based on rental income. Borrowers submit appraisals and rent schedules. Closing times are about 21–30 days.
- Property types: single‑family rentals, multi‑unit up to four units, townhomes, condos and short‑term rentals.
Investors who want long amortization periods or interest‑only payments to boost cash flow will appreciate Newfi’s product set.
6. Tidal Loans
Tidal Loans stands out for its ability to finance properties with DSCRs below 1.0. Features include:
- DSCR minimum of 0.75 or lower, though rates and down payments increase as DSCR falls. A DSCR of 1.25 yields the best terms.
- 30‑year fixed and interest‑only programs, with minimum credit scores around 600.
- Loan amounts can reach into the millions and include larger multifamily or mixed‑use properties. Tidal will finance rural or nonconforming properties that other DSCR lenders avoid.
- No income or tax documentation; only property cash flow and appraisal are required.
Tidal Loans is suitable for investors purchasing value‑add or turnaround properties where early cash flow might be tight but long‑term upside is strong.
7. HomeAbroad (for foreign nationals)
HomeAbroad specialises in DSCR loans for foreign investors. Key features:
- No U.S. credit history needed; underwriting uses the property’s rent and the borrower’s international financial statements.
- Down payment of 25 % and loan amounts up to $10 million. Closings take about 27 days.
- DSCR threshold: best terms at ≥ 1.0, but investors can use a no‑ratio program for DSCRs below 1 with higher down payments.
- Interest rates around 6.1 % (scenario based).
HomeAbroad is ideal for international investors eyeing Lexington’s equine and university‑driven rental market.
8. Stock Yards Bank & Trust
While not a DSCR lender per se, Stock Yards Bank & Trust offers commercial real‑estate loans that local investors often use as a DSCR substitute. Their loans feature max LTV 80 % and require a DSCR of 1.20. Terms generally range up to five years with 20‑year amortizations. Because the loans are recourse to the owners and underwritten on vacancy history and lease quality, this program suits experienced investors seeking a bank relationship.
DSCR loan rates, terms and qualification factors in Lexington
Interest rates for DSCR loans in Lexington largely mirror those in Louisville, ranging from 5.75 % to 8 % depending on credit score, DSCR ratio, property type and loan term. Most lenders cap LTVs at 80 % for purchases and 75 % for cash‑out refinances. Down payments are thus 20–25 %. Lenders require credit scores starting around 620–660; the best rates go to borrowers above 700. Reserve requirements run from 3–12 months of PITI, especially when DSCR falls below 1.0.
Borrowers can choose from 30‑year fixed mortgages, 30‑year interest‑only or 40‑year amortizations. ARMs (5/1 or 7/1) may offer lower initial rates. Many lenders allow unlimited financed properties, enabling investors to scale portfolios quickly.
Common mistakes investors make with DSCR loans
- Ignoring local market rent trends – Setting rents too high based on national averages can cause vacancy and hurt DSCR. Lexingon’s rents vary by neighborhood from $942 in Calumet to $1,663 in Hamburg. Investors should conduct rent comps before closing.
- Underestimating maintenance on older homes – Lexington’s historic neighborhoods may require significant repairs. Investors should account for capital expenditures when calculating NOI.
- Improper property management – University neighborhoods may experience frequent turnover. Selecting property managers experienced with student rentals and noise ordinances helps maintain occupancy and DSCR.
- Inadequate reserves – Borrowers may qualify at DSCR 0.8 but must maintain reserves; failing to do so can strain finances if expenses rise.
- Not planning for exit strategy – DSCR loans often carry prepayment penalties. Investors should align the loan term with their hold period or ensure they can absorb penalties if refinancing early.
DSCR loans vs. traditional investment property financing
Traditional mortgages require full documentation and DTI calculations, limiting how many properties investors can finance. They also often restrict loan amounts and require seasoning of rental income. DSCR loans, by contrast, allow investors to qualify based on property cash flow and to hold unlimited properties. Rates and down payments are higher, but the flexibility and speed of DSCR loans often outweigh these costs for investors focused on scaling portfolios quickly.
Who DSCR loans are best for (and who they are not)
Best suited for:
- Seasoned real estate investors who want to purchase multiple properties or refinance a portfolio. DSCR loans enable them to leverage cash flow from each property independently.
- Self‑employed or high net‑worth individuals without stable W‑2 income. DSCR lenders don’t require personal income verification, which simplifies underwriting.
- Out‑of‑state and foreign investors who want to own Lexington rental property without relocating. Lenders like HomeAbroad help international buyers overcome credit hurdles.
- Long‑term buy‑and‑hold or short‑term rental investors; as long as the property produces strong rents, DSCR loans work for both strategies.
Not ideal for:
- Owner‑occupied properties – DSCR loans cannot be used for primary residences.
- Investors with little capital – The 20–25 % down payment and reserve requirements mean DSCR loans are not a good fit for highly leveraged novice investors.
- Properties needing extensive rehab – DSCR lenders want stabilized or nearly stabilized cash flow. Fix and flip or heavy rehab projects need a bridge or hard money loan first, followed by a DSCR refinance.
Lexington‑specific investing considerations
- Horse industry influence – The equine industry draws wealthy owners and tourists, supporting short‑term rental demand. However, local zoning restricts Airbnb in some neighborhoods. Investors should review city ordinances.
- University demand – The University of Kentucky and Transylvania University create large student populations seeking rentals near campus. Student housing may produce higher turnover but remains resilient even in economic downturns.
- Industrial and tech growth – Toyota’s nearby assembly plant and Lexmark’s presence highlight Lexington’s manufacturing base. New high‑tech companies and research institutions further diversify employment. Investors may find demand for quality rentals in suburban areas near these employers.
- Submarket variability – Rents range from $942 in Calumet to $1,663 in Hamburg. Appreciation potential is strongest in neighborhoods undergoing redevelopment or near employment hubs like the Distillery District.
- Agricultural heritage – Lexington’s large equine and agricultural industry influences land values and zoning. Properties outside the urban core may be subject to agricultural restrictions; investors should confirm zoning and land use before purchasing.
Conclusion
Lexington’s blend of equine heritage, diversified manufacturing, tech growth and a strong university presence produces a vibrant rental market. DSCR loans empower investors to leverage this market by qualifying on cash flow alone. Among the many DSCR lenders, SelectHomeLoans.com offers the most balanced package of competitive rates, flexible DSCR requirements, quick closings and local insight. Their willingness to work with DSCRs as low as 0.8 and to finance both long‑term and short‑term rentals makes them the go‑to lender for Lexington investors. By working with SelectHomeLoans.com, investors can confidently acquire and refinance properties across Lexington’s varied neighborhoods and build wealth through cash‑flowing real estate.
