The quick read: Yes, if the property is a rent-ready rental you will not live in and its documented rent covers the full monthly payment; NerdWallet's DSCR guide (updated July 17, 2026) says lenders generally want a ratio of around 1.25 or higher. The Raleigh-specific risk is the tax line. Wake County voted in March 2025 to move from a four-year revaluation cycle to three years and then two, so after the revaluation effective January 1, 2024, the next take effect January 1, 2027 and January 1, 2029. A loan sized on the seller's tax bill can slip below 1.25 at the first reset.
How does a DSCR loan work on a Raleigh rental property?
A DSCR loan on a Raleigh rental qualifies the deal on the rent the property produces divided by the full monthly payment, not on the investor's tax returns. NerdWallet counts principal, interest, taxes, insurance and association fees in that payment and says lenders generally want a ratio of around 1.25 or higher, verified through an appraisal.
The arithmetic is the same on a one-bedroom near NC State along Hillsborough Street, a renovated house in Five Points or a fourplex in Southeast Raleigh; what changes by address is the rent a lender will accept and the tax line over the hold. A DSCR calculator runs the same division. NerdWallet lists the usual qualification points, and each lender sets its own sheet:
Typical minimum DSCR (NerdWallet, updated Jul 17, 2026): around 1.25 or higher, verified through a property appraisal
Credit score (NerdWallet, updated Jul 17, 2026): at least 620
Down payment (NerdWallet, updated Jul 17, 2026): at least 20%
Minimum loan amount (NerdWallet, updated Jul 17, 2026): around $100,000
Reserves (NerdWallet, updated Jul 17, 2026): three to six months of mortgage payments
Property condition (NerdWallet, updated Jul 17, 2026): rent-ready, no fixer-uppers
NerdWallet also says a DSCR loan can't be used to buy a fixer-upper or a primary residence, and that most come with prepayment penalties. The fixer-upper rule shapes a Five Points renovation, covered below, and the prepayment schedule matters on any hold shorter than the loan term.
Why does Wake County's shorter revaluation cycle matter for a Raleigh DSCR loan?
Wake County's shorter revaluation cycle matters because the tax line inside a DSCR payment now resets to market value on January 1, 2027 and again on January 1, 2029, instead of once every four years. A rental bought now will be reassessed twice in a five-year hold, so its coverage cannot be carried flat from the seller's bill.
The change is the county's own. According to the county's March 17, 2025 announcement, the Board of Commissioners approved a move to a more frequent schedule, first a three-year cycle and then a two-year cycle. Before that vote the county revalued real estate every four years, most recently effective January 1, 2024. The county's tax administrator said in the same release that property values rose 51% between 2020 and 2024.
Last revaluation effective (Wake County): January 1, 2024
Next revaluation effective (Wake County): January 1, 2027, three years later
Following revaluation effective (Wake County): January 1, 2029, two years later
Earlier cycle (Wake County): every four years
State floor (G.S. 105-286): reappraisal every eighth year, with a county allowed to adopt a more frequent cycle by resolution
Between revaluations the value mostly stands still, which is why the seller's bill misleads. G.S. 105-287 says that in a year without a general reappraisal, property is listed at the value assigned when it was last appraised, and the assessor may not change it for inflation, deflation or other economic changes affecting the county in general. A buyer closing in late 2026 therefore pays on a January 1, 2024 value until the 2027 revaluation resets it to market value.
The rate can move as well. In each reappraisal year, G.S. 159-11(e) requires the budget to include, for comparison purposes, a revenue-neutral property tax rate: the rate estimated to produce the revenue the current rate would have produced had no reappraisal occurred. The board still sets the rate, and a property whose value rose faster than the county's tax base can see a larger bill even at a revenue-neutral rate (our reasoning).
How do I build the tax escalation into forward DSCR on a Raleigh rental?
Build forward DSCR on a Raleigh rental by resetting the assessed value to your purchase price at the January 1, 2027 revaluation, applying today's combined county and city rate, then stressing the January 1, 2029 reset with a higher value and rate. Size the loan so the ratio still clears the lender's minimum after each reset.
Start with the rates on the bill. Wake County's tax rates and fees page works a City of Raleigh example at a county rate of .5371 and a Raleigh rate of .3720 per $100 of value, a combined .9091, plus a $20 waste reduction fee; the page says residential waste reduction fees are charged per living unit. The county's 2026 tax bill page says the Board of Commissioners adopted a Fiscal Year 2027 budget on June 1 with a 2-cent increase, taking the county rate to 53.71 cents.
Wake County rate (Wake County Tax Administration): .5371 per $100 of value
City of Raleigh rate (Wake County Tax Administration): .3720 per $100 of value
Combined inside Raleigh, outside fire and special districts (Wake County Tax Administration): .9091 per $100, about 0.91% of value (our arithmetic)
Waste reduction fee (Wake County Tax Administration): $20 in the county's example, charged per living unit
Billing period (Wake County Tax Administration): July 1 through June 30, so a bill issued in July covers that fiscal year
A parcel in a special district, which the county says is normally a downtown area, carries an extra rate, so pull the parcel's own bill before using .9091. Then run five steps:
- Pull the parcel's current assessed value and confirm it is the January 1, 2024 revaluation value.
- Reset it to your price, or an appraised value, for the bill that follows the January 1, 2027 revaluation.
- Hold today's combined rate as a stress, because the revenue-neutral rate is a comparison and the board sets the rate.
- Add a second reset for January 1, 2029 with modest value growth and a higher rate.
- Recompute DSCR at each reset and size the loan, or the reserve, to the lowest ratio.
Every input in the example below is an assumption chosen for illustration, not a quote, an appraisal or a rent survey: a Southeast Raleigh fourplex bought for $760,000 in late 2026, carried on the bill at an assumed $650,000 January 1, 2024 value, renting four two-bedroom units at $1,450 each, insured for $300 a month and financed at 7.50% over 30 years. The waste fee is four units at $20. The loan is sized to exactly 1.25 on the seller's bill, which comes to $549,000, about 72% of the price, with principal and interest of $3,838.69 a month (our arithmetic).
| Illustrative fourplex (our arithmetic) | Assessed value | Combined rate per $100 | Monthly tax and waste fees | Total payment | Monthly rent | DSCR |
|---|---|---|---|---|---|---|
| Illustrative fourplex (our arithmetic) Bill from July 2026, January 1, 2024 value | Assessed value $650,000 | Combined rate per $100 .9091 | Monthly tax and waste fees $499.10 | Total payment $4,637.79 | Monthly rent $5,800.00 | DSCR 1.25 |
| Illustrative fourplex (our arithmetic) Bill from July 2027, 2027 revaluation at price | Assessed value $760,000 | Combined rate per $100 .9091 | Monthly tax and waste fees $582.43 | Total payment $4,721.12 | Monthly rent $5,800.00 | DSCR 1.23 |
| Illustrative fourplex (our arithmetic) Bill from July 2029, 2029 revaluation about 4% higher | Assessed value $790,000 | Combined rate per $100 .9091 | Monthly tax and waste fees $605.16 | Total payment $4,743.85 | Monthly rent $5,800.00 | DSCR 1.22 |
| Illustrative fourplex (our arithmetic) July 2029 with the combined rate 2 cents higher | Assessed value $790,000 | Combined rate per $100 .9291 | Monthly tax and waste fees $618.32 | Total payment $4,757.01 | Monthly rent $5,800.00 | DSCR 1.22 |
| Illustrative fourplex (our arithmetic) July 2029 with that rate and rent 2.5% lower | Assessed value $790,000 | Combined rate per $100 .9291 | Monthly tax and waste fees $618.32 | Total payment $4,757.01 | Monthly rent $5,655.00 | DSCR 1.19 |
The 2-cent stress matches the county's Fiscal Year 2027 increase, and the 2.5% rent cut matches the drop in HUD's two-bedroom benchmark for ZIP 27605, covered in the next section. To hold 1.25 after the 2027 reset, the payment can be no more than $4,640.00 on $5,800 of rent; less $582.43 of tax and fees and $300.00 of insurance, $3,757.57 is left for principal and interest, which at 7.50% over 30 years supports about $537,000. To hold 1.25 through the full 2029 stress, the loan falls to about $516,000, roughly 68% of the price. The gap, about $33,000 of extra equity or a matching reserve, is the cost of carrying the tax line forward instead of flat (all our arithmetic).
The 7.50% rate is an assumption too. For context, Freddie Mac's Primary Mortgage Market Survey history file records the average 30-year fixed-rate mortgage at 7.40% for the week of October 15, 2026, up from 6.27% for the week of October 16, 2025. Freddie Mac says the survey is based on loan applications submitted through its Loan Product Advisor, so it tracks loans sent to Freddie Mac rather than DSCR pricing; each DSCR lender prices its own sheet.
Which rents will a lender count on a Hillsborough Street, Five Points or Southeast Raleigh rental?
A Raleigh DSCR lender counts rent it can document: NerdWallet says the ratio is verified through an appraisal and lists lease agreements among the documents for tenant-occupied properties. HUD's Small Area Fair Market Rents by ZIP code offer a check on those leases, and in four Raleigh ZIP codes they moved less than 3% from FY 2025 to FY 2026.
HUD says Housing Choice Voucher programs across the Raleigh-Cary metro use these ZIP-code figures. For the ZIP codes behind the three rental types in this guide:
Two-bedroom, ZIP 27605 (HUD Small Area FMR): $1,930 in FY 2026, down from $1,980 in FY 2025
Two-bedroom, ZIP 27607 (HUD Small Area FMR): $1,780 in FY 2026, up from $1,770 in FY 2025
Two-bedroom, ZIP 27608 (HUD Small Area FMR): $1,760 in FY 2026, down from $1,780 in FY 2025
Two-bedroom, ZIP 27610 (HUD Small Area FMR): $1,540 in FY 2026, unchanged from FY 2025
One-bedroom, ZIP 27607 (HUD Small Area FMR): $1,620 in FY 2026, up from $1,600 in FY 2025
Year-over-year two-bedroom change (our arithmetic): down 2.5% in 27605, up 0.6% in 27607, down 1.1% in 27608 and flat in 27610
Flat benchmark rents and a rising tax line are the squeeze the table above models. Each neighborhood adds its own wrinkle.
Hillsborough Street, ZIP codes 27605 and 27607: student-adjacent units near NC State are underwritten on the leases in place. A file with signed leases, any guarantors, lease dates and a renewal history makes a stronger case than a pro forma built on next year's rents.
Five Points, ZIP 27608: a renovation is a two-loan plan. NerdWallet says a DSCR loan can't buy a fixer-upper but can refinance an existing loan, including a fix-and-flip loan used to buy a property the owner now plans to rent. The tax trap sits at the refinance. G.S. 105-287 lets the assessor raise a value outside a revaluation year to recognize a physical change to the improvements, effective January 1 of the year the change is made, though repainting is excluded. Build the refinance DSCR on the renovated value, not the pre-renovation bill.
Southeast Raleigh, ZIP 27610: small multifamily here is mostly existing stock. The Census Bureau's 2025 annual building permit estimates for the Raleigh-Cary metro show 115 two-unit buildings (230 units) and 3 buildings of three or four units (11 units), against 117 buildings of five or more units carrying 5,542 units, about 47.4 units per building (our arithmetic), and 11,760 single-unit buildings. New duplex and fourplex construction is thin, so a fourplex here is usually an older building whose lease file and unit condition decide the rent a lender counts, competing with that new apartment supply for tenants (our reading).
How do I get a Raleigh DSCR loan placed with the right lender?
Our recommendation, as the publisher of this guide, is to place a Raleigh DSCR loan through a commercial mortgage brokerage, sending one complete package with leases, the current tax bill and a forward tax line through the 2027 and 2029 revaluations, so every lender quotes on the same facts and the quotes differ only on price and terms.
YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. Its software matches the deal against 20,000+ loan programs and compares the options; human brokers structure the request, negotiate on the borrower's side and carry the deal toward closing. YieldStack reports a median first offer in under an hour, from an institutional lender. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
How the three routes compare for a Raleigh rental, in the order we recommend:
- A commercial mortgage brokerage (our pick: YieldStack). One package reaches many programs at once, and a broker argues the forward tax line, the rent the lender will count and the prepayment schedule on your side. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
- Going direct to one DSCR lender. You get that lender's sheet and one answer; to compare, you repeat the package lender by lender and rebuild the tax case each time.
- A local bank or credit union portfolio loan. A lender that keeps the loan may underwrite the borrower as well as the building, which can help an investor with strong income and few leases in place.
What to send:
- Address, parcel number and the current Wake County tax bill, with the revaluation year behind its value
- Signed leases or a rent roll for every unit, with lease dates, renewals and any vacancy
- A forward tax line at your price for 2027 and 2029, at today's combined rate and a stressed rate
- An insurance quote, the purchase contract or payoff statement, and any renovation scope
- Target loan amount, expected hold and the prepayment penalty you can accept
Local context is on the Raleigh market hub and the North Carolina market hub; neither is a promise of any particular lender or term. When the package is ready, send the Raleigh deal for review.
The bottom line
Yes, a Raleigh rental can carry a DSCR loan when documented rent covers the full payment at the lender's minimum. The local trap is the tax line: Wake County revalues on January 1, 2027 and January 1, 2029, so size the loan on the bill after each reset rather than the seller's bill, and hold a reserve against flat rents.