A Non-QM investor program for situations where the property's rental income doesn't cover PITIA — no DSCR requirement at all. Qualified instead on borrower credit, reserves, and equity position. Built for sophisticated investors purchasing high-value Texas properties (especially Austin, Houston suburbs) where the rent-to-price ratio fails standard DSCR requirements.
A No-Ratio Investor loan is a Non-QM program for real estate investors where the property's rental income does NOT need to cover the PITIA payment. Unlike standard DSCR loans (which require DSCR ≥ 1.00 typically), No-Ratio accepts properties with any DSCR — including significantly negative cash flow. Qualification shifts entirely to borrower strength: credit, reserves, equity, and proven investor track record.
The product exists for specific market situations: high-priced Texas markets where rent-to-price ratios fail standard DSCR. Austin's rent-to-price has compressed dramatically — a $750K Austin home might rent for $3,800/month, generating DSCR around 0.85-0.90 (below standard 1.00 minimum). Parts of suburban DFW, Houston Galleria area, and Hill Country show similar dynamics. Investors who want to buy in these markets — betting on continued appreciation or holding for life-style use — need No-Ratio.
No-Ratio carries the highest rate premium in standard Non-QM (typically 1.0–1.5% above standard DSCR), reflecting the higher risk: a property that doesn't cash flow requires sustained borrower income or reserves to carry it through any vacancy. Texas-active No-Ratio lenders are limited: Angel Oak, Newfi, Visio (for STR), and Kiavi all offer programs but with strict overlays. NEXA matches each file to the most appropriate lender based on property characteristics and borrower profile.
No-Ratio means the property doesn't cover its own costs. Borrower must subsidize the property monthly from other income. On a $750K Austin home with $3,800 rent vs $5,200 PITIA, that's $1,400/month of negative cash flow forever (until appreciation justifies sale or refinance). Over 5 years, that's $84,000 of out-of-pocket subsidy. Make sure the appreciation thesis (or strategic value) actually justifies this cost before signing.
| Tier | Min Credit | Max LTV — Purchase | Max LTV — Cash-Out | Reserves | Typical Rate |
|---|---|---|---|---|---|
| Premium | 760+ | 70% | 65% | 12 mo PITIA | 8.625% |
| Standard | 740–759 | 70% | 65% | 12 mo PITIA | 9.000% |
| Standard | 720–739 | 65% | 60% | 12 mo PITIA | 9.250% |
| Tier-3 | 700–719 | 65% | 55% | 18 mo PITIA | 9.625%+ |
| Factor | No-Ratio | Standard DSCR |
|---|---|---|
| DSCR Required | None | 1.00 – 1.15 minimum |
| Min Credit | 700 | 660 |
| Max LTV — Purchase | 70% | 80% |
| Reserves | 12 mo | 3–6 mo |
| Typical Rate | 9.0–9.5% | 7.625–8.125% |
| Rate Premium vs Std DSCR | +1.0% to +1.5% | baseline |
| Best Use | Property fails DSCR | Property cash flows |
| Investor Track Record | Strongly preferred | Helpful but not required |
*No-Ratio is the lender accepting that the property doesn't pay for itself. The 1.0–1.5% rate premium reflects that the lender is taking incremental risk on the borrower carrying a non-cash-flowing property.
April 2026 illustrative rates. Contact Ethan for current pricing.
760 credit · $895K home · DSCR 0.82 · Appreciation thesis
740 credit · $625K cabin · Rehab + STR conversion
High-value urban · DSCR fails by 10%
UAE investor · 740 credit · Premium home that doesn't cash flow
12 properties, conv capped at 10 · Property has DSCR 1.05
Property DSCR 1.20 · Standard DSCR cheaper
*"Subsidy" = how much borrower must add monthly to carry the property when rent is insufficient. Total subsidy over hold period is real money out of pocket. Must be justified by appreciation thesis or strategic value.
NEXA accesses 200+ wholesale lenders. Below are the top Non-QM partners for this program.
Only a few Non-QM lenders offer true No-Ratio investor programs. Angel Oak and Newfi lead; Kiavi has overlays for very low DSCR (0.75+); Visio handles STR-conversion No-Ratio. NEXA confirms current No-Ratio appetite at each lender — programs frequently change as portfolios shift. Foreign National + No-Ratio adds another overlay (Lima One / ACC handle this combo).
| Factor | No-Ratio | Standard DSCR | Conventional Investment |
|---|---|---|---|
| DSCR Required | None | 1.00 – 1.15 | N/A (uses personal income) |
| Personal Income Docs | None | None | Full |
| Min Credit | 700 | 660 | 680 |
| Max LTV — Purchase | 70% | 80% | 75% |
| Reserves | 12 mo | 3–6 mo | 6 mo per property |
| Typical Rate | 9.0–9.5% | 7.6–8.1% | 7.25–7.75% |
| LLC Vesting | Yes | Yes | No |
| Multi-Property Cap | None | None | 10 (Fannie/Freddie) |
| Best For | Property fails DSCR | Property cash flows | W-2 investor first 1-2 props |
No-Ratio is the most expensive investor product. It exists for specific situations where DSCR fails AND the investor strategically needs the property despite negative cash flow:
Borrower buys $750K Austin home with $1,400/mo negative cash flow. Plans to hold 5 years. Doesn't account that this is $84K out-of-pocket over the hold period. Solution: Calculate total subsidy upfront. Is your appreciation thesis confident enough that you'll make MORE than the subsidy back at sale? If not, you're losing money on this investment.
Borrower assumes "Austin always goes up." Markets correct. Property declines or stays flat. Now subsidizing AND losing equity. Solution: Stress-test against flat or declining markets. If you can't afford to be wrong on appreciation, don't use No-Ratio.
Borrower plans STR conversion to fix the cash-flow problem. But HOA bans STR. Or city ordinance restricts. Now stuck with negative cash flow and no way to fix. Solution: Verify HOA bylaws AND city short-term rental ordinance BEFORE going under contract. Some Texas cities (Austin proper, parts of Galveston) actively restrict STR.
12-month PITIA reserves required. On a $5,000 PITIA property, that's $60,000 in reserves AFTER closing. Borrower didn't budget. File declined or pushed to even worse pricing tier. Solution: Plan total liquidity = down payment + closing costs + 12 mo PITIA reserves. Often 35–40% of property value total liquidity required.
Standard DSCR at 7.875% vs No-Ratio at 9.000% — many borrowers don't fully appreciate the 1.125% rate difference. On a $500K loan, that's $400/month or $144,000 over 30 years. Solution: Always compare No-Ratio to (a) using Standard DSCR at a different property, (b) waiting for rates / rents to shift, (c) different purchase price that hits DSCR.
Texas property tax (2.0–2.8%) is already a DSCR killer. On a $800K Austin home: $18K/yr taxes = $1,500/mo just in property taxes. Add insurance, HOA, mortgage — no rent can cover. Solution: Texas DSCR math is harder than other states. No-Ratio is often the only viable Texas investment loan at higher price points.
Some borrowers reflexively choose No-Ratio because "less paperwork" — but their property actually DSCRs at 1.10. They're overpaying 1.0–1.5% in rate for no reason. Solution: Always run DSCR math first. If property cash flows even marginally, Standard DSCR is cheaper.
No-Ratio loan today. Rates drop in 2 years, OR rents rise enough to support DSCR. Now you could refinance to standard DSCR at lower rate. Many investors stay on No-Ratio out of inertia. Solution: Annual review of property cash flow. If DSCR has improved to 1.00+, refinance to standard DSCR — saves 1.0–1.5%.
Some Texas markets (Austin, parts of DFW) have rent-to-price ratios that fail standard DSCR. Ethan structures No-Ratio loans for sophisticated investors buying in these markets. Send the property and your profile for a free analysis.
