Rental Property DSCR Calculator
DSCR — debt-service-coverage ratio — loans qualify the property, not your personal income. Lenders divide the rent by the full monthly housing cost to get this ratio. See yours and whether it clears the common approval thresholds.
Debt-service-coverage ratio
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DSCR = gross monthly rent ÷ PITIA. Many lenders want at least 1.00–1.25 and price their best terms above 1.25. Some use net operating income instead of gross rent; see below.
What DSCR means for a rental loan
A DSCR loan is a mortgage for investment property that qualifies based on the property's income rather than your personal tax returns or pay stubs. That makes it popular with self-employed investors and anyone whose paper income doesn't reflect their buying power. The single number underwriters care about is the debt-service-coverage ratio (DSCR): how much the rent covers the property's full monthly debt obligation.
PITIA is the full housing payment: Principal, Interest, Taxes, Insurance, and Association dues (HOA). A DSCR of 1.00 means the rent exactly covers the payment. Above 1.00, the property produces a cushion; below 1.00, it runs a monthly shortfall the lender expects you to cover.
The thresholds that matter
- 1.00 — the property breaks even. Some programs lend here, often with a larger down payment or rate premium.
- 1.20 — a common minimum for competitive DSCR programs.
- 1.25 — frequently where the best pricing and highest leverage open up.
A handful of lenders will go below 1.00 (sometimes called "no-ratio" or sub-1.0 DSCR products), but expect higher rates and stricter reserves. The higher your DSCR, the more negotiating room you have on rate and loan-to-value.
How to move your DSCR
If your ratio falls short, three levers move it: a larger down payment (which lowers the loan amount and the P&I), a longer amortization or interest-only period (which lowers the monthly payment), or higher rent (a stronger lease or a market-rent appraisal). Shopping insurance and challenging an inflated tax assessment also help, since both feed directly into PITIA.
Frequently asked questions
Is rent measured gross or net?
It depends on the lender. Many DSCR loan programs use gross market rent from the appraisal's rent schedule. Others deduct expenses to reach net operating income. Always confirm — the same property can pass under one method and fail under the other.
What rent figure should I use?
Use the lower of your signed lease and the appraiser's market-rent estimate, since lenders typically underwrite to the more conservative of the two.
Can I qualify with a DSCR below 1.0?
Sometimes. Certain lenders offer sub-1.0 or no-ratio DSCR loans, usually with higher rates, lower leverage, and larger cash reserves. Use this tool to see how far below the line you are before you shop.
What credit score do I need for a DSCR loan?
Most DSCR lenders look for a minimum credit score around 620–680, though stronger scores unlock better rates and higher leverage — similar to how a higher DSCR does.
Do DSCR loans require a down payment?
Yes, typically 20%–25% down at minimum, sometimes more for a DSCR below 1.20 or for certain property types. Down payment requirements scale with risk, just like the interest rate does.
Are DSCR loan rates higher than conventional mortgage rates?
Generally yes — DSCR loans typically carry rates 0.5–2 percentage points above a comparable owner-occupied conventional loan, reflecting the higher risk lenders take on investment property that qualifies on rental income alone.
Can I use a DSCR loan for a primary residence?
No. DSCR loans are designed for investment properties that generate rental income; they aren't available for a home you intend to occupy as your primary residence.
How many rental properties can I finance with DSCR loans?
Unlike conventional financing, which caps the number of conventionally financed properties, DSCR loans generally don't have a hard limit on how many properties an investor can hold, since each loan qualifies on that property's own income rather than the borrower's overall debt load.