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Lafayette, LA DSCR LoansHybrid Market

DSCR Loans in Lafayette, LA

Finance investment properties in Lafayette with a DSCR loan. Qualify based on rental income, not tax returns. Median rent at $1,050/mo with +2.8% annual growth.

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$1,050/mo
Median Rent
$200K
Median Home Price
+2.8%
Rent Growth (YoY)
490K
Metro Population

Market data updated 2026-01-30

Lafayette Market Snapshot

Why Invest in Lafayette?

  • Hub of Cajun country with unique cultural appeal and tourism
  • Oil and gas services sector provides employment base
  • University of Louisiana at Lafayette drives student rental demand

Key Economic Drivers

EnergyHealthcareTechnologyHigher Education
Median Rent
$1,050/mo
Rent Growth
+2.8%

Property Types We Finance

Single Family2-4 UnitsMulti-Family

Popular Investment Areas

River RanchBroadmoorYoungsvilleBroussard

Metro Population

490K

Lafayette metro area — a strong tenant pool for rental property investors.

DSCR Analysis

Example DSCR Calculation for Lafayette, LA

Here's how a typical DSCR loan works using Lafayette's actual market data.

Loan Structure

Purchase Price$200,000
Down Payment (20%)$40,000
Loan Amount$160,000
Interest Rate7.5%

Monthly Costs (PITIA)

Principal & Interest$1,119
Property Tax (0.55% rate)$92
Insurance$300
Total PITIA$1,511

DSCR Result

Monthly Rent
$1,050
÷
Monthly PITIA
$1,511
=
DSCR Ratio
0.69

Based on Lafayette's median home price of $200,000 and median rent of $1,050/month, a typical DSCR investment produces a challenging DSCR ratio. Investors may need a larger down payment (25-30%) to improve the ratio, or should target properties priced below the median. With a 20% down payment of $40,000, the monthly PITIA (principal, interest, taxes, insurance) comes to $1,511. The local property tax rate of 0.55% and annual insurance cost of $3,600 are factored into this calculation.

Estimated Cap Rate
3.7%
Lafayette's estimated cap rate is 3.69%, indicating a appreciation-focused market where price growth drives returns.
Cash Flow Analysis

Lafayette Cash Flow Projection

Year 1 and Year 5 projections based on Lafayette's +2.8% annual rent growth and 6.4% vacancy rate.

Year 1 Projection

Gross Annual Rent$12,600
Vacancy Loss (6.4%)-$806
Effective Gross Income$11,794
Annual PITIA-$18,125
Net Cash Flow-$6,331
Cash-on-Cash Return-15.8%

Year 5 Projection

Projected Monthly Rent$1,173/mo
Gross Annual Rent$14,076
Vacancy Loss (6.4%)-$901
Annual PITIA-$18,125
Net Cash Flow-$4,950
Cash-on-Cash Return-12.4%

A Lafayette investment property at the median price generates a negative cash flow of $6,331 annually in Year 1, which is typical for appreciation-focused markets. This accounts for the local 6.40% vacancy rate. By Year 5, with 2.80% annual rent growth, the gap narrows to $4,950 annually.

Market Comparison

Lafayette vs. Louisiana Average

How Lafayette's rental market compares to the Louisiana statewide average.

Median Rent
$1,050/mo
↓ 19.2% below state avg
Median Home Price
$200K
↓ 4.8% below state avg

Lafayette's median rent of $1,050/month is 19.2% below the Louisiana state average of $1,300/month. Home prices at $200,000 are 4.8% below the state average of $210,000.

Investment Strategy

Lafayette Investment Strategy: Hybrid

Lafayette excels as a balanced market where $1,050/mo rents and $200K entry points create genuine cash-flow potential with appreciation upside. The energy economy provides tenant stability. With a 6.30% rent-to-price ratio and 2.8% rent growth, DSCR loans here underwrite well. Consider River Ranch for established returns or Broadmoor for value-add plays.

DSCR Ratio
0.69
Cap Rate
3.7%
Vacancy Rate
6.4%
Tax Rate
0.55%
FAQ

DSCR Loan Questions for Lafayette

What DSCR ratio do I need to qualify for an investment property loan in Lafayette, LA?
Lafayette properties at median price points typically achieve DSCR ratios around 0.91 to 1.06, which may require rate buydowns or larger down payments. The Energy sector and strong tenant demand support consistent rental performance.
Can I buy a Lafayette rental property with less than 25% down?
DSCR loans in Lafayette typically require 20-25% down payment. Based on the median home price of $200K, investors should plan for approximately $40,000-$50,000 down, plus closing costs and reserves.
What areas of Lafayette are best for DSCR loan investors?
The best Lafayette neighborhoods for investors depend on your strategy. River Ranch appeals to value-add investors, while Broadmoor offers different opportunities. Consider the Energy employment base when selecting locations.
What are the STR regulations for DSCR loan investors in Lafayette?
DSCR lenders evaluate Lafayette short-term rentals using either actual STR history (12+ months preferred) or projected income from third-party data providers. The market supports STR strategies in select areas, but lenders typically require 75-80% of projected income for conservative underwriting.
What's the property tax rate for Lafayette investment properties?
Lafayette property taxes at 0.55% are in line with state averages. For DSCR investors, this means careful underwriting is needed to ensure adequate coverage.
How has rent growth trended in Lafayette?
Lafayette remains attractive for real estate investors in 2026 due to hub of cajun country with unique cultural appeal and tourism. With +2.8% rent growth and 6.4% vacancy, fundamentals remain solid. Oil and gas services sector provides employment base
Are there prepayment penalties on Lafayette DSCR loans?
Yes, first-time investors can get DSCR loans in Lafayette. While some lenders prefer experienced investors, many programs accept first-time buyers with strong credit (680+), adequate reserves, and properties meeting DSCR requirements. Lafayette's established market makes it accessible for new investors.

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