Hays County

San Marcos Mortgage Broker: Home and Investment Property Loans

San Marcos has about 40,000 university students in a city of roughly 70,000 people, and no honest mortgage guide to this market can skip that fact.

It shapes everything — what gets built, what rents, what sells, and which financing actually works. The median sale price runs $310,000 to $335,000, one of the more accessible figures in the Austin–San Antonio corridor. But a meaningful share of what trades here is bought as a rental, and rentals qualify under completely different rules than a house you plan to live in.

So this guide runs two tracks: buying a home here, and buying property to rent out.

Buying a home in San Marcos

The tax picture

Combined rates typically run 2.10% to 2.45% — city of San Marcos, Hays County, San Marcos CISD, and the Austin Community College district.

That is higher than Buda, lower than much of Williamson County. On a $320,000 home you are looking at roughly $560 to $650 a month in taxes, and that line belongs in your budget from the first conversation, not at underwriting.

A sale resets the appraised value with the Hays Central Appraisal District, and the seller's exemptions end at closing. If you are buying a home someone has owned for fifteen years, expect a materially higher bill than theirs.

Where people buy

Blanco Vista is the large master-planned community on the north side toward Kyle — production builders, an amenity center, newer construction, and generally clean conforming appraisals. Verify the MUD status per section; parts of it carry one.

La Cima sits west of the interstate in the hills, with newer and generally higher-priced construction and Hill Country topography. Steeper lots sometimes mean engineered foundations, which can raise both the build cost and the appraiser's attention.

Willow Creek and the established neighborhoods near the university are older, smaller, and where the rental math tends to work.

Downtown and the historic district hold early-1900s homes on small lots. Older systems mean the same appraisal and condition considerations that apply anywhere with pre-war housing stock, and a renovation loan is often the right tool.

Programs

Conventional loans at 3% to 5% down covers most purchases here comfortably under the conforming limit. FHA at 3.5% down is common at these prices. VA for eligible borrowers, with the Texas disabled veteran property tax exemption worth more than any rate you could shop. USDA appears on eligible properties outside the city limits at zero down — verify the address, since the map shifts with development.

Down payment assistance through TSAHC and TDHCA is worth checking at San Marcos price points; several programs are not limited to first-time buyers. More on assistance.

Buying a rental in San Marcos

This is where San Marcos genuinely differs from every other town in this corridor.

The market

Texas State University drives sustained rental demand, and the housing stock reflects it — small single-family homes near campus, duplexes and fourplexes, and purpose-built student housing. Two structural features matter to your numbers:

Leasing is seasonal. The cycle runs to the academic calendar. A property vacant in October is likely vacant until the following summer, because the renter pool has already signed. Model your vacancy assumption against that reality rather than a generic 5%.

By-the-bed leasing is common. Some properties lease per bedroom rather than per unit. It can raise gross revenue and it complicates lender documentation, because underwriting wants to see leases that add up predictably.

How lenders qualify a rental here

If you are buying a rental, you have two paths.

Conventional investment financing. Requires 15% down on a single unit, 25% on two-to-four units, full income documentation, and a qualifying debt-to-income ratio. Agency rules count only 75% of gross rent, and generally only once it appears on a Schedule E. A property you bought in March may contribute nothing to your qualifying income while its full payment counts against you.

DSCR financing. Qualifies on the property's rent against its payment, with no tax returns and no DTI calculation. Expect 20-25% down. This is the product most San Marcos investors end up using, particularly anyone past the conventional property count or self-employed with heavy write-offs. Full detail on DSCR loans.

One San Marcos-specific caution on DSCR: some lenders take the lower of your executed lease or the appraiser's market rent schedule. On a by-the-bed property grossing well above conventional market rent, that haircut can take your ratio below the floor. Confirm the lender's rent methodology before you go under contract, not after.

The numbers that decide it

The ratio lenders compute is gross monthly rent divided by the full payment including taxes, insurance and any HOA. At a 2.3% tax rate, taxes alone are a large share of that denominator — which is precisely why San Marcos deals that pencil on a spreadsheet sometimes fail in underwriting. How to calculate and stress-test it.

The river, and why it matters to your loan

The San Marcos River emerges from the Edwards Aquifer at a constant 72 degrees year-round, and it is one of the most biologically significant spring systems in the Southwest — home to several endangered species found nowhere else.

For a homebuyer that translates into two practical things. First, the river is the reason people love living here: tubing, the trail system, and Sewell Park on the university campus. Second, proximity to the river means flood zones are a genuine consideration. San Marcos has experienced serious flooding, and properties in mapped zones require flood insurance as a separate policy. Check the specific address on the FEMA map before you offer.

The Meadows Center for Water and the Environment runs glass-bottom boat tours over the springs at the old Aquarena Springs site. Wonder World Cave is the only cave in Texas formed by an earthquake rather than water. The San Marcos Premium Outlets pull shoppers from both Austin and San Antonio, and the retail employment that comes with them is a real part of the local economy.

Not sure which fits? Compare every loan program we place.

Frequently asked questions

What are property taxes in San Marcos, TX? Combined rates typically run 2.10% to 2.45%, covering city, Hays County, San Marcos CISD and ACC. Confirm the parcel with the Hays Central Appraisal District.

Can I buy a rental property in San Marcos? Yes, and many do. Conventional investment financing requires 15-25% down with full income documentation. DSCR loans qualify on the property's rent instead, with no tax returns, typically at 20-25% down.

How do lenders handle student rentals? Carefully. Leasing is seasonal and by-the-bed arrangements are common, and some lenders use the lower of your actual lease or the appraiser's market rent. Confirm the methodology before you go under contract.

Do I need flood insurance in San Marcos? If the property sits in a mapped flood zone, yes — and parts of the city near the river do. It is separate from homeowner's coverage and your lender will require it. Check the address on the FEMA map.

What credit score do I need in San Marcos? FHA generally starts near 580 with 3.5% down. Conventional typically wants 620 or better. DSCR investment loans commonly start around 620, with better leverage above 700.

Is USDA financing available near San Marcos? On eligible properties outside the city limits, yes — at zero down. The eligibility map is drawn by address and updated periodically, so verify the specific property.

Can I use a DSCR loan for a property I plan to live in? No. DSCR loans are business-purpose loans and require non-owner-occupied property. For a home you will occupy, conventional, FHA or VA is the path.

Two different conversations

Buying a home here and buying a rental here are genuinely different files, and we handle both. Tell us which one you are doing and we will tell you honestly what the numbers support.

Start your application · DSCR loan programs · Call 737-347-1314

Nearby & Related