DSCR Calculator
Calculate your Debt Service Coverage Ratio to see if your rental property qualifies for DSCR loans. Most lenders require a minimum 1.0-1.25 DSCR.
Rental Income
Operating Expenses (Annual)
Loan Details
DSCR Results
This DSCR is below most lender minimums. The property does not generate enough income to cover debt.
Typical DSCR Requirements
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Ready to Fund This Deal?
Compare top hard money lenders for fix & flip, rental, and construction loans.
Kiavi
Pre-approved in 24 hours, close in 10-14 days
- Pre-approval in 24 hours
- Close in 10-14 days
- $350 cash bonus at closing
New Silver
Data-driven approval in under 5 minutes online
- Approved in under 5 minutes
- Fix & flip, rental, construction
- $50 per application bonus
We may earn a commission when you apply through these links at no extra cost to you.
Understanding DSCR for Investment Properties
The Debt Service Coverage Ratio (DSCR) is a key metric that lenders use to evaluate investment property loans. It measures the property's ability to cover its debt obligations from rental income alone.
DSCR Formula
DSCR = Net Operating Income (NOI) ÷ Annual Debt Service
A DSCR of 1.0 means the property generates exactly enough income to cover debt payments. Most lenders prefer a buffer, typically requiring 1.2 to 1.25 DSCR.
Why DSCR Loans Are Popular
- No personal income verification required
- Qualify based on rental income, not W-2s
- Scale your portfolio without DTI limits
- Close in LLC or corporate name
- Faster approval process
Frequently Asked Questions
What is a good DSCR for an investment property?▼
Most lenders require a minimum DSCR of 1.0 to 1.25. A DSCR of 1.25 or higher is considered good and will qualify you for better rates. A DSCR above 1.5 is excellent and shows strong cash flow coverage.
How do lenders calculate DSCR?▼
DSCR is calculated by dividing Net Operating Income (NOI) by the annual debt service (mortgage payments). For example, if your property generates $24,000 NOI annually and your mortgage payments are $18,000/year, your DSCR is 1.33.
What is a DSCR loan?▼
A DSCR loan is an investment property loan that qualifies borrowers based on the property's rental income rather than personal income. This makes it easier for investors to qualify for multiple properties without traditional income documentation.
Can I get a DSCR loan with less than 1.0 DSCR?▼
Some lenders offer no-ratio or low-DSCR loans, but they typically require larger down payments (25-30%) and charge higher interest rates. Most investors aim for properties with DSCR above 1.0.
Does DSCR include property taxes and insurance?▼
Yes, when calculating NOI for DSCR, you subtract all operating expenses including property taxes, insurance, HOA fees, property management, and maintenance from the gross rental income.
Learn More
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