The Best DSCR Lenders in Rhode Island (Rental Property Loans) [2025 Guide]

Rhode Island may be the smallest state in the country, but it boasts some of the highest real estate values and strongest rental demand in New England. Providence, Newport, Warwick and tiny coastal villages draw tourists, students and professionals year‑round. In 2025, the average monthly rent in Rhode Island reaches $2,295, and two‑bedroom units average about $2,200. HUD sets the 2025 FMR for a two‑bedroom apartment at $1,645, with one‑bedroom units at $1,338. While these FMRs are only slightly below the national average (Rhode Island rents are about 1.56 % lower than the national two‑bedroom FMR), the gap between FMR and actual average rent indicates that many Rhode Island rentals command premium prices. Furthermore, only about 43 % of leased homes rent for less than $1,000, and nearly 9.33 % of rentals lease for $2,000 or more. High rent levels and a shortage of buildable land make DSCR loans especially valuable for investors seeking to scale in this coastal market.

This guide explores DSCR lending in Rhode Island for 2025. It covers how DSCR loans work, details state‑specific requirements, ranks lenders – with Select Home Loans at the top – and explains how to choose a lender and apply. Whether you’re buying a Victorian triplex in Providence or converting a beach house in Narragansett into a short‑term rental, DSCR financing can provide the leverage you need.

DSCR Fundamentals

Debt Service Coverage Ratio (DSCR) loans qualify borrowers based on the income the property generates relative to its debt payments. The formula divides the property’s net operating income by annual mortgage payments. A ratio above 1.0 indicates positive cash flow; lenders often require at least 1.0 or 1.25. Because DSCR underwriting focuses on rental income rather than personal income, investors can avoid providing tax returns or W‑2s. The loans are ideal for both long‑term and short‑term rentals and can be structured under an LLC.

Rhode Island DSCR Requirements and Benefits

Rhode Island’s high property values and limited inventory create unique DSCR considerations. Below are the typical requirements and benefits as of 2025.

• DSCR Threshold: Many lenders require a minimum DSCR of 1.0. LBC Mortgage notes that a “base performance ratio” of 0.75 may be accepted if the borrower makes a larger down payment. The optimal DSCR for the best terms remains 1.25 or higher. Some lenders, like Malve Capital highlighted by Biglaw Investor, will accept DSCR as low as 0.75.
  
• Credit Score: Minimum credit score requirements start at 620 (LBC Mortgage), though other lenders prefer 660 or higher. Borrowers with higher scores qualify for better rates.
  
• Down Payment & LTV: Down payments are typically 25 % in Rhode Island. LBC Mortgage lists a starting equity requirement of 25 %, while Malve Capital offers up to 80 % LTV on purchases and 75 % LTV on cash‑out refinances. Investors should be prepared to invest more equity than in lower‑cost states.
  
• Loan Amounts: Rhode Island DSCR loans often start at $200k, reflecting the state’s high home prices. Loan limits vary by lender but commonly extend up to $3 million or more. Because property values are higher, some investors may need jumbo DSCR loans.
  
• Property Types: DSCR loans are available for single‑family homes, 2–4‑unit buildings, condominiums, and small apartment complexes. Short‑term rentals are permitted if the borrower can document rental income or provide reliable projections.
  
• Additional Requirements: In coastal zones, lenders may require flood insurance. Appraisers will consider seasonal rent fluctuations (summer vs. off‑season) for beach properties. Due to the state’s older housing stock, some lenders may require building inspections or environmental reports.
  

Benefits for Rhode Island Investors

Rhode Island’s high rents create strong DSCRs, enabling investors to leverage DSCR loans to purchase or refinance premium properties. Because average rents exceed FMR by a significant margin, many properties easily achieve DSCR ratios above 1.25. DSCR loans also allow investors to hold properties in an LLC, finance multiple properties and cash out equity without hitting conventional mortgage limits. These features make DSCR financing an attractive alternative to high‑interest hard‑money loans or complex commercial mortgages.

Ranking the Best DSCR Lenders in Rhode Island

1. Select Home Loans (Top Overall)

Website: SelectHomeLoans.com

Phone: 888-550-3296

Select Home Loans is our number‑one DSCR lender in Rhode Island due to its experience with high‑value coastal properties and flexible underwriting. The lender accepts DSCR ratios as low as 0.75 for well‑qualified borrowers, though ratios above 1.0 yield better pricing. Borrowers need a minimum credit score of 620, and down payments start at 25 % to reflect the higher property values. Loan amounts range from $200k to $5 million, with options for 30‑year fixed, 30‑year interest‑only and 40‑year amortisation. Select Home Loans will finance vacation rentals and allow properties in LLCs, making it ideal for investors purchasing beach houses in Narragansett or student rentals near Brown University. The company’s Rhode Island team helps investors navigate flood insurance requirements and seasonal rent analysis, providing a smooth experience from application to closing.

2. LBC Mortgage

LBC Mortgage specialises in DSCR loans for Rhode Island investors. The company states that the starting DSCR requirement is 1.0, with an optimal ratio of 1.25. LBC will consider DSCR as low as 0.75 if the borrower provides a higher down payment. Minimum credit score is 620, and the lender requires at least 25 % equity. Loan amounts start at $200,000 and can exceed $3 million. LBC is a strong choice for investors who need flexible DSCR thresholds but can commit to higher down payments.

3. Malve Capital (via Biglaw Investor)

Biglaw Investor’s Rhode Island DSCR lender roundup highlights Malve Capital, which offers DSCR loans with minimum DSCR of 0.75, LTV up to 80 %, 30‑year fixed or adjustable terms, and interest‑only options. The program does not require DTI or personal income documents, and it uses a soft credit check. Down payments start around 20 %, but higher LTVs may require DSCR above 1.0. Malve Capital is ideal for investors seeking maximum leverage on high‑cash‑flow properties.

4. Biglaw Investor’s Lender Network

Biglaw Investor curates a network of DSCR lenders that serve Rhode Island. According to its guide, the typical product requires DSCR ≥1.0, credit score ≥660, LTV up to 80 %, and offers both long‑term and short‑term rental loans with rates starting around 6.0 %. Cash‑out loans may be capped at 75 % LTV, and some lenders offer no‑ratio loans (DSCR not calculated) with lower LTVs. Biglaw Investor functions as a broker, matching borrowers with lenders that fit their profile. Investors appreciate the one‑stop approach and variety of options.

5. Select National Lenders (Newfi, Griffin Funding, Angel Oak, CoreVest)

Rhode Island investors can also work with national DSCR lenders:

• Newfi: Accepts DSCR down to 0.8, minimum credit score 640, 15/30/40‑year terms, and down payments of 20 %. Offers interest‑only periods and financing for short‑term rentals.
  
• Griffin Funding: Requires DSCR around 1.0, credit score 620, down payment 20 %, and provides loan amounts up to $20 million.
  
• Angel Oak: Loans up to $1.5 million, DSCR near 1.0, credit score 620, 40‑year terms and interest‑only options.
  
• CoreVest: DSCR around 1.0, LTV up to 80 %, loan amounts starting at $75k and exceeding $2 million.
  

These lenders provide consistent underwriting and the ability to finance properties in multiple states, which is helpful for investors building regional portfolios across New England.

6. Local Credit Unions and Community Banks

Rhode Island’s community banks, such as BankNewport and Washington Trust, occasionally offer cash‑flow‑based rental loans akin to DSCR financing. These programs often require DSCR of 1.2 or higher and down payments of 25–30 %. Credit unions may offer lower rates but limit financing to one or two properties. Local lenders excel at handling nuanced properties like historic homes in Providence or converted multifamily units in Newport, but their underwriting is sometimes conservative.

7. Private Money Lenders

Hard money and private lenders remain an option for investors needing quick closings or higher leverage. These lenders typically accept DSCR below 1.0 but charge higher rates (8–12 %) and points. They may be useful for bridge financing on fix‑and‑flip projects or short‑term rentals awaiting stabilised income. When using private lenders, plan to refinance into a DSCR loan once rents stabilise.

How to Choose a DSCR Lender in Rhode Island

To choose the right DSCR lender, weigh your property’s DSCR, down payment capacity and long‑term strategy. If you have a high‑cash‑flow property with DSCR above 1.25, lenders like LBC Mortgage will offer favourable terms. Investors seeking maximum leverage can consider Malve Capital’s 0.75 DSCR program. For borrowers with credit scores in the low 600s, Select Home Loans or Newfi may be the best fit. Also factor in closing timeline and local expertise: coastal properties often require additional due diligence for flood zones and environmental hazards. Work with lenders experienced in Rhode Island’s unique coastal market.

Step‑by‑Step DSCR Loan Application in Rhode Island

1. Analyse rent and DSCR. Use market data to project rent (e.g., average rent of $2,295 and FMR of $1,645 for a two‑bedroom). Compute the DSCR by dividing net operating income by annual debt payments. Because property taxes and insurance can be high in Rhode Island, include accurate estimates.
   
2. Gather documentation. Prepare lease agreements or rental projections, bank statements, proof of reserves, credit report, purchase contract and entity documents. If purchasing a coastal property, obtain flood insurance quotes.
   
3. Compare lenders. Contact Select Home Loans, LBC Mortgage and at least one national lender like Newfi. Compare DSCR thresholds, LTV limits, fees, interest rates and prepayment penalties. For luxury properties, ensure the lender’s maximum loan amount meets your needs.
   
4. Submit the application. Complete the lender’s application, pay the appraisal deposit and provide required documents. Many DSCR lenders order a rent survey in addition to the standard appraisal.
   
5. Underwriting and approval. Lenders will verify the DSCR and ensure the property meets their guidelines. They may request additional reserves or a lower LTV if DSCR falls below 1.0.
   
6. Close and manage the property. After approval, review the closing disclosure, sign documents and wire your down payment. Monitor the property’s performance to maintain a healthy DSCR and be prepared to refinance or sell if market conditions change.
   

Improving DSCR for Rhode Island Properties

Because Rhode Island properties command high rents, raising DSCR may involve increasing occupancy and reducing expenses. Strategies include converting units to furnished rentals during summer months, adding amenities like on‑site laundry or bike storage to command higher rent, and appealing property taxes or energy bills. If DSCR is low due to a high purchase price, consider a larger down payment or partner with another investor to reduce financing costs. For short‑term rentals, optimize pricing during peak tourist seasons and minimise vacancies.

Conclusion

Rhode Island’s combination of high rents, limited land and strong tourism makes it a lucrative but challenging market for rental investors. DSCR loans unlock this market by allowing borrowers to qualify based on rental income rather than personal income. Lenders such as Select Home Loans, LBC Mortgage and Malve Capital provide flexible programs with DSCR thresholds ranging from 0.75 to 1.25. By understanding the state’s high down payment requirements and choosing a lender experienced in coastal properties, investors can tap into Rhode Island’s premium rents and build profitable portfolios.