Real Estate

Debt Service Coverage Ratio

DSCR is the primary metric lenders use to qualify investment property loans: NOI divided by annual debt service. Most lenders require 1.25x minimum, meaning the property generates 25% more income than needed to cover the mortgage.

Gross Annual Rent ($)

Annual Operating Expenses ($)

Annual Mortgage Payment ($)

DSCR

—x

—

Annual NOI

—

Annual Debt Service

—

Lender Status

DSCR	Lender View	Typical Loan Type
<1.0x	Property loses money	Will not qualify
1.0–1.2x	Marginal	Hard money only
1.2–1.25x	Minimum acceptable	Some conventional lenders
1.25–1.5x	Good — meets standard	Most DSCR lenders (best rates)
1.5x+	Strong	Best terms, highest LTV