DSCR - Debt Service Coverage Ratio

DSCR A Debt Service Coverage Ratio (DSCR) is a loan based on the borrower's ability to generate enough cash flow from the property to cover the debt payments (debt service). The lender calculates the DSCR by dividing the projected rents done via an appraisal and dividing it by the proposed mortgage payment including taxes, insurance and other costs if applicable.

DSCR loans are often used by real estate investors and business owners to purchase or refinance investment properties. They offer more flexible underwriting criteria without the need of tax returns.