Private Money Hawaii
What DSCR Do You Need for Hawaii Investment Properties? (2025 Guide)
If you’re buying an investment property in Hawaii — whether it’s a long-term rental on Oahu, a Maui Airbnb, a Waikiki condo, or a Big Island resort unit — one of the most important numbers lenders care about is your Debt Service Coverage Ratio (DSCR).
But here’s the problem:
Most investors don’t know what DSCR you actually need in Hawaii.
Online lists show generic mainland ratios like 1.20 or 1.25, but Hawaii lending is different. Higher HOA fees, STR zoning rules, insurance requirements, and variable rental markets change the DSCR thresholds dramatically.
This guide breaks down exactly what DSCR you need for Hawaii investment properties in 2025, by property type, by island, and by rental strategy — plus how to qualify faster and avoid common Hawaii-specific pitfalls.
What DSCR Really Measures (Simple Definition)
DSCR = Rental Income ÷ Monthly Mortgage Payment (PITIA)
Where PITIA includes:
- Principal
- Interest
- Taxes
- Insurance
- HOA fees (major factor in Hawaii)
- Lease rent (if leasehold)
If DSCR is:
- 1.20+ → Strong
- 1.00–1.19 → Acceptable
- Below 1.00 → Break-even or negative
DSCR tells lenders one thing:
“Does the property’s cash flow strong enough to cover its payment?”
Why Hawaii Has Different DSCR Requirements
Hawaii’s real estate market isn’t like the mainland. Your DSCR requirement depends on:
High condo HOA fees
Many Waikiki condos run $800–$1,800/mo.
Island-specific insurance
Hurricane + flood + lava zone insurance all affect PITIA.
STR zoning laws
Airbnb-allowed zones have higher income potential, reducing DSCR requirements.
Higher purchase prices
Even small payment changes impact DSCR significantly.
Property type risks
Condotels and resort-zone buildings have their own lender overlays.
Because of this, Hawaii DSCR requirements are more property-specific than any other state.
DSCR Requirements for Hawaii Investment Properties (2025 Breakdown)
Here is the most accurate, Hawaii-specific DSCR requirement table available.
1. Single-Family Investment Properties (All Islands)
- Minimum DSCR: 1.00
- Best pricing at: 1.20–1.30
- Below 1.00: Possible with higher down payment
SFRs are the easiest Hawaii properties to finance because they have no HOA fees and predictable rent.
2. Long-Term Rental Condos (Oahu, Maui, Kauai, Big Island)
- Minimum DSCR: 1.05–1.10
- Strong DSCR: 1.20+
- Challenging: Below 1.00 due to HOA
HOA fees are the deal-maker or deal-breaker here.
Example:
- Rent: $3,000
- HOA: $950
- PITIA: $2,400
- Total Payment = $3,350
DSCR = 3,000 ÷ 3,350 = 0.89 → High HOA kills DSCR.
3. Airbnb / STR Properties
STRs often produce the highest DSCR in Hawaii.
Typical requirements:
- Minimum DSCR: 1.15
- Strong DSCR: 1.30–1.50
- Exceptional DSCR: 1.60+
If Airbnb income is documented, lenders ease requirements.
Example:
Kihei condo earning $12,000/mo during peak + $8,000 avg → strong DSCR even with higher HOA.
4. Condotels (Waikiki, Maui, Kona, Princeville)
Condotels are higher risk → stricter DSCR.
- Minimum DSCR: 1.10–1.20
- Best pricing: 1.25+
- Below 1.00: Rarely accepted
These buildings often have hotel operations, higher HOA, and strict underwriting.
5. Resort-Zoned Condos (Maui + Kauai + Big Island)
- Minimum DSCR: 1.05–1.15
- Strong: 1.25–1.40
Because STR income can be strong, these often qualify easier than Waikiki high-rise units.
6. Multifamily (2–4 Units)
- Minimum DSCR: 1.00–1.10
- Strong: 1.20+
- Below 1.00: Requires strong reserves
Hawaii multifamily properties often qualify well due to multiple income streams.
DSCR Requirements by Island (Local 2025 Guide)
Each island has different rental economics. Here’s how DSCR requirements typically vary:
Oahu (Honolulu, Kapolei, Waikiki)
- High HOA fees
- Complex STR rules
- High prices
DSCR Target: 1.10–1.25
Waikiki STR-approved buildings often have strong income — but high HOA brings DSCR down.
Maui (Kihei, Lahaina, Wailea)
- Exceptional STR demand
- Higher nightly rates
- High insurance post-wildfires
DSCR Target: 1.15–1.35
STR properties usually qualify well, especially Kihei resort condos.
Big Island (Kona, Waikoloa, Hilo)
- Good STR demand in Waikoloa + Kona
- Lower HOA than Oahu
- Lava zones can affect insurance
DSCR Target: 1.10–1.30
Long-term rentals in Kona often hit DSCR 1.15–1.20 easily.
Kauai (Poipu, Princeville, Kapaa)
- High STR income in resort zones
- Higher HOA in many complexes
DSCR Target: 1.15–1.40**
Kauai STR properties can generate some of the strongest DSCR ratios in Hawaii.
What DSCR You Need Depends on the Lender (Hawaii-Specific Rules)
Lenders fall into 3 categories:
1. Hawaii-specialty DSCR lenders (best for condos + STR)
- Allow Airbnb income
- Familiar with Hawaii buildings
- Faster approvals
- Flexible DSCR tiers
2. Mainland DSCR lenders (strictest)
- Often require long-term rent only
- Higher DSCR minimums
- Slow with condo review
3. Hybrid lenders (case-by-case)
- Accept STR only with documentation
- DSCR minimum 1.10–1.20
For accurate modeling, investors should run their numbers through the Hawaii DSCR Calculator
How DSCR Impacts Loan Terms in Hawaii
DSCR doesn’t just decide whether you qualify — it controls:
Your interest rate
Higher DSCR = lower rate
Lower DSCR = higher rate
Your down payment
Strong DSCR → 20% down possible
Weak DSCR → 25–35% down
Your closing speed
Strong DSCR deals close fast because they require fewer exceptions.
Your cash flow
Even small DSCR changes can flip a deal from negative to positive.
How to Improve DSCR Fast (Hawaii Edition)
Use STR income if your lender allows
Airbnb income can raise DSCR from 1.05 → 1.50.
Lower your HOA exposure
Choose buildings with <$700/mo HOA if possible.
Increase down payment slightly
A 5% increase can raise DSCR enough for better pricing.
Switch insurance providers
A $100/month reduction improves DSCR significantly.
Choose fee-simple over leasehold
No lease rent = higher DSCR.
Use a DSCR calculator before making offers
Never buy without modeling PITIA + rent accurately.
Run scenarios using the Hawaii DSCR calculator.
FAQ — DSCR Requirements for Hawaii Investment Properties
What DSCR do lenders prefer in Hawaii?
1.20+ is considered strong for most property types.
Can I qualify with DSCR below 1.00?
Yes, but with a larger down payment.
Do condos require higher DSCR?
Often yes, because HOA fees increase PITIA.
What DSCR is required for Airbnb units?
Most lenders want 1.15–1.30 depending on building.
Do all lenders accept STR income?
No — Hawaii-specialty lenders are best.
Does the island affect DSCR requirements?
Yes — Maui + Kauai STR units often exceed DSCR expectations, while Waikiki condos struggle due to HOA fees.
Looking for fast, flexible financing in Hawaii? Private Money Hawaii offers 7–14-day closings, local underwriting, and asset-based approvals designed for investors who want to move fast and invest smarter across all islands.
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