Debt-Service Coverage Ratio (DSCR) (DSCR)
Direct definition
The ratio of a property's net operating income to its total debt payments.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
DSCR = NOI ÷ debt service. A DSCR of 1.0 means the property just covers its mortgage; above 1.0 means positive coverage; below 1.0 means the owner subsidizes it.
Why it matters
It's the core metric investment-property lenders use — often instead of personal income — to qualify a loan.
Where you may see it
- Loan program guidelines
- Property income statement
- Underwriting conditions
A real-world example
Educational and illustrative only
A common misunderstanding
DSCR loans don't ignore the property's finances entirely — they typically replace personal income verification with property cash flow analysis.
Frequently asked
What DSCR do lenders want?+
Program minimums commonly land at or above 1.0, with better pricing at 1.20+.
Can a property with DSCR below 1.0 still finance?+
Yes — through no-ratio DSCR programs, at different pricing and reserve requirements.
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- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026