About DSCR Investment Loan

The DSCR or debt service coverage ratio is the relationship of a property’s annual net operating income (NOI) to its annual mortgage debt service (principal and interest payments).

Commercial lenders use the DSCR to analyze how large of a commercial loan can be supported by the cash flow generated from the property, or to determine how much income coverage there is at a certain loan amount.

Two of the most important factors used to determine the approvability of a commercial mortgage request are the DSCR and loan-to-value (LTV). Often times the loan amount may be debt service constrained and the maximum LTV not obtainable.

Calculating the debt service coverage ratio

he DSCR calculation is rather simple. A business’s DSCR is calculated by taking the property’s annual net operating income (NOI) and dividing it by the property’s annual debt payment. The DSCR is typically shown as a number followed by x.

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Income limits apply and may change based on geographical areas. A minimum credit score is required.


Your income limits depend on your geographical area. Some areas do not have income limits.

Credit Score

Applicant should have the bank specified credit score beginning at 640 +


The higher your DSCR, the more income you have to pay off your debt.

Frequently Ask Questions

While it varies between lenders, typically anything above 1.2 is usually considered good, and anything above 1.5 is considered great.

One way to lower your DSCR is to increase your down payment to lower your loan amount. When that isn’t possible, you can always increase your credit score for better rates, rehab your property to charge more rent, or plan your investment area very carefully to optimize for higher rent and lower tax rates.

Keep in mind that even if your DSCR ends up lower than expected, it does not mean that your property is a bad investment. There are many reasons to make a property investment– from a high appreciating area to a longer-term investment plan based on market trends.

Apply for a free prequalification and your loan officer can let you know the limits in your area.

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Now apply for a DSCR Investment Loan online, All you need to do is provide your details below application form.