Builders First Funding

    Free Tool

    DSCR Calculator

    Enter your rental income and the lender's monthly payment (PITIA) to see your debt service coverage ratio — the single number most DSCR lenders use to decide whether your property qualifies.

    Use actual or appraiser-projected market rent.

    The lender's full housing payment, not just principal and interest.

    Your DSCR

    0.00x

    Enter your numbers above to see your ratio

    Monthly rent
    $2,400
    Monthly PITIA
    $0
    DSCR ratio
    0.00x

    Get matched with the best DSCR program for your deal.

    We compare 100+ lending programs. Rates starting at 5.99%.

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    The Basics

    What Is DSCR?

    DSCR stands for Debt Service Coverage Ratio. It's a single number that answers one question: does the property's rental income cover the lender's full monthly housing payment?

    The formula is simple: DSCR = Monthly Rent ÷ Monthly PITIA. PITIA is the lender's full housing payment — Principal + Interest + Taxes + Insurance + Association dues. A DSCR of 1.0 means rent exactly equals PITIA. A DSCR of 1.25 means rent is 25% higher than the payment.

    Most DSCR programs require a minimum ratio of 1.0x. Some flex down to 0.75x with compensating factors — strong credit, larger down payment, or experience. Higher DSCR generally means better pricing: a 1.25x deal will price tighter than a 1.0x deal at the same lender, because the cash-flow cushion lowers default risk.

    The reason DSCR loans matter is what they don't require: no personal W-2s, no tax returns, no employment verification. The property qualifies itself based on its rental income. This is why DSCR loans are the standard product for self-employed investors, anyone whose tax returns understate their cash position, and portfolio investors who would otherwise be capped by conventional lenders.

    Quick Facts

    DSCR Loan Quick Facts

    No income verification required

    Based on property cash flow, not personal income

    Available for SFR, 2–4 unit, and 5+ unit

    30-year fixed terms available

    Rates starting at 5.99%

    Common minimum DSCR: 1.0x (some programs to 0.75x)

    LTV up to 80%

    Nationwide

    Ready to talk specifics? Review our DSCR program or tell us about your deal — we'll come back with the program that fits your DSCR ratio.

    FAQ

    DSCR, Answered

    Most DSCR lenders consider 1.0x the minimum threshold — rent exactly covers the lender's full housing payment (PITIA). A DSCR of 1.25x or higher typically qualifies for the best pricing. Some programs accept ratios as low as 0.75x for experienced borrowers, with rate or LTV adjustments to compensate.

    Yes — though options narrow and pricing typically adjusts. Programs that accept sub-1.0 DSCR usually want compensating factors: stronger credit (700+), larger down payment (30%+), a clean reserve position, or completed prior investor projects. We work with several lenders comfortable in the 0.75–0.99x band.

    DTI (debt-to-income) is a personal qualification metric — total monthly debts divided by gross monthly income. Conventional mortgages use DTI; banks want it below 43–50%. DSCR is a property qualification metric — rental income divided by the property's mortgage payment. DSCR loans don't look at your personal income, tax returns, or W-2s at all. This is why DSCR loans are the standard for self-employed investors and portfolio scaling.

    Most non-owner-occupied residential investment properties qualify: single-family rentals, townhomes, condos, small multifamily (2–4 units), and some 5+ unit properties. DSCR loans are not for primary residences. Property must generate rental income — either currently rented or with an appraiser's market rent estimate.

    Three levers move the ratio. First, the numerator: raise rent — re-tenant at market, add value-add upgrades (in-unit laundry, parking), or convert to mid-term/STR where the submarket supports it. Second, the denominator: lower PITIA — put more down (smaller loan, smaller payment), buy down the rate, or appeal a high tax assessment. Third, structure: choose a longer amortization (30-year vs. 25-year) to lower the monthly P&I. The simplest move is usually a 5–10 point larger down payment; it's the lever you control directly at close.

    Yes — most DSCR programs accept market rent estimates when a property is vacant, being acquired, or in the process of being repositioned. The lender will use an appraiser's Form 1007 (Single Family Comparable Rent Schedule) or equivalent to set the qualifying rent. If actual leased rent exceeds projected market rent, the lender typically uses the lower of the two. For a current rental at below-market rent, plan to qualify off the lower number unless you can document a planned increase at lease renewal.

    PITIA is the lender's complete housing payment: Principal + Interest on the mortgage, property Taxes (monthly portion of annual), property Insurance (monthly portion of annual), and Association dues (HOA, condo fees, special assessments). DSCR is rent ÷ PITIA. Some quick DSCR calculations only use Principal + Interest, which overstates the ratio. The lender uses full PITIA.

    It's a useful screening tool, not an underwriting decision. The calculation matches what lenders use, but real underwriting will use the lender's tax assessment (often higher than current), the lender's insurance quote (often higher than your existing policy), and conservative rent estimates from an appraiser. Use this to screen deals quickly; verify with a real term sheet before committing capital.

    Not financial advice. Market data and deal scenarios shown here are illustrative and based on public information available at time of publication. Investors should perform their own due diligence on current market conditions, property-level economics, insurance, and local regulations before making investment or financing decisions.

    Also See

    Fix & Flip Loans

    Bridge-to-DSCR strategy

    New Construction

    Build-to-rent exit

    Bridge Loans

    Stabilize before DSCR

    Estimate your loan

    Hard money and construction calculator

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