How it’s calculated
What DSCR means
DSCR is the rent divided by the full monthly payment: principal, interest, taxes, insurance and HOA dues. A 1.0 ratio means the rent covers the payment. Many lenders go below 1.0 with more down, and the best pricing usually starts around 1.2. Hawaii HOA dues can be high, so they matter a lot here.
Which rent counts
Match the rent to Hawaii’s rules
| Rental type | Where it’s legal | Rent the lender uses |
|---|---|---|
| Long-term (12-month lease) | Everywhere | Appraiser’s market rent or the signed lease |
| 30-day-plus furnished | Most of Oahu outside resort zones | Usually market rent; some lenders use 30-day history |
| Nightly (under 30 days) | Resort and hotel zones, registered or grandfathered units only | Short-term rental history or an AirDNA-style projection, with lender-specific haircuts |
A lender will not count nightly income from a unit that isn’t legally allowed to rent nightly. On Maui, apartment-district vacation rentals are being phased out under Bill 9 (by January 1, 2029 in West Maui and January 1, 2031 elsewhere), so lenders are underwriting those condos on long-term rent. Hawaii STR rules →
Qualification guidelines
What DSCR lenders look at
| Factor | Typical requirement | Required? |
|---|---|---|
| Credit score | About 660+; better pricing at 720+ | ✓ YES |
| Down payment | 20–25%; 25–35% for condotels | ✓ YES |
| Reserves | Often 3–12 months of payments | ✓ YES |
| Investment use only | Not your primary residence | ✓ YES |
| Tax returns and W-2s | Not needed | ✗ NOT REQUIRED |
Common questions
DSCR · Hawaii FAQ
Can I use a DSCR loan for a Waikiki condo?
Yes, including many non-warrantable buildings and condotels, with the right lender. Expect a larger down payment for condotels.
Will a DSCR lender use my Airbnb income?
Only if nightly rentals are legal for that unit and the lender accepts short-term rental income. Otherwise it uses long-term market rent.
Can I buy in an LLC?
Yes. Most DSCR lenders close in an LLC with a personal guarantee.
Sources: Honolulu Ordinance 22-7; Maui County Bill 9 (2025); individual DSCR lender guidelines, which vary.
