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Investment Properties

DSCR Loans Explained

The mechanics of debt-service coverage ratio underwriting.

5 min readBy NexGen Capital Corp · NMLS 1766649Updated 2026Investment Properties

Short answer

The mechanics of debt-service coverage ratio underwriting.

DSCR = monthly rent ÷ monthly PITIA (principal, interest, taxes, insurance, association dues). Above 1.0 is cash-flowing.

Ratio calculation

DSCR = monthly rent ÷ monthly PITIA (principal, interest, taxes, insurance, association dues). Above 1.0 is cash-flowing.

Pricing tiers

Better DSCRs earn better rates; sub-1.0 DSCR loans exist but come with more conservative terms.

Key takeaways

  • Above 1.0 = property covers itself.

Frequently asked questions

Related mortgage option

Ready to apply this to a real loan? Review how Investment Property Loans work in Florida, or estimate your monthly payment before you talk to an advisor.

Sources

Program rules change and individual lender overlays apply. Verify specifics with the agency or with a licensed NexGen Capital advisor before relying on them.

Reviewed by NexGen Capital Corp

Written and reviewed by the licensed mortgage team at NexGen Capital Corp, a Florida mortgage brokerage (NMLS #1766649). Verify our license on NMLS Consumer Access.

Last reviewed: 2026

This article is educational and is not a commitment to lend or an offer of credit. Speak with a licensed NexGen advisor about your own situation.

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