By state
DSCR and Investor Loans in Massachusetts
Loan terms are national, but Massachusetts property taxes and insurance move your DSCR. Here is how much, with a worked example.
Massachusetts has high prices and very low vacancy around Boston. Investors concentrate in Boston, Worcester, and Springfield, and the financing question is the same one everywhere: will the deal cover its own loan once the local costs are counted?
Loan terms are national; Massachusetts changes your costs
The rates, leverage, and minimums on a DSCR loan or hard money loan are set by lenders that operate nationwide, so the ranges in the independent Rate and Terms Survey apply in Massachusetts as anywhere. What Massachusetts changes is your full monthly payment, because two of its parts, property taxes and insurance, are local.
How Massachusetts property taxes and insurance move your DSCR
The effective property tax rate in Massachusetts is moderate to high, often around 1.14 percent of value. Insurance is elevated. Both feed directly into PITIA, the full payment a lender divides into the rent to get your debt service coverage ratio, so a deal in Massachusetts can score differently from an identical property in another state purely on these lines.
A worked Massachusetts example
Take a $600,000 property renting for $3,100 a month, financed with 25 percent down at an illustrative 7.5 percent over 30 years. The loan is $450,000, so principal and interest run about $3,146. Add roughly $570 a month in property tax and $133 in insurance, and the full PITIA payment is about $3,849. The ratio is $3,100 divided by $3,849, or about 0.81, which falls below the 1.0 floor, so this deal would need more rent, a larger down payment, a lower price, or a lender that allows a sub-1.0 ratio with reserves. Change the tax or insurance line and watch the ratio move; that is the Massachusetts factor in one number.
Confirm your Massachusetts deal
Run the property through the DSCR calculator with the real county tax bill and a true insurance quote, then check your own profile with the pre-qualifier and read how to qualify. Choose the right loan and confirm the deal qualifies before you apply, which is the whole idea behind The Lender’s Lens.