Investment Properties

DSCR Loans Explained

The mechanics of debt-service coverage ratio underwriting.

5 min readUpdated 2026Investment Properties

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

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