A Debt Service Coverage Ratio (DSCR) loan is a type of real estate loan for Real Estate investors that evaluates the ability to generate sufficient cash flow from the property to cover the loan payments.
The higher the DSCR, the better your chances of getting approved for the loan. You will need a DSCR of at least 1.2 which means your net operating income is at least 20% higher than the total debt service payments.
DSCR loans are used to finance the purchase of multifamily and investment real estate properties
Minimum DSCR