DSCR Loan Calculator

What is DSCR?

Debt service coverage ratio (DSCR) is a key metric lenders use to evaluate whether a rental property generates enough income to cover its loan payments. It compares a property's net operating income (NOI) to its total debt obligations.

In simple terms, DSCR answers one question: Does this property generate enough income to pay for itself?

A DSCR above 1.0 means the property generates more income than required to cover debt. A DSCR below 1.0 indicates the property may not produce enough income to meet loan payments.

For real estate investors, DSCR is especially important because many lenders, including Figure, use it instead of personal income to qualify borrowers for loans on rental properties.

What counts as NOI in a DSCR loan?

Net operating income (NOI) includes the income your property generates after operating expenses, but before debt payments.

Because DSCR loans rely heavily on property performance, accurately calculating NOI is essential to understanding what you may qualify for.

What is a good DSCR for rental property financing?

DSCR requirements vary by lender, but many investment property loans require a ratio above 1.0. At Figure, borrowers typically need a DSCR of at least 1.0 to qualify.

Here's how to think about DSCR ranges:

• Below 1.0: Property may not qualify based on cash flow alone
• 1.0+: Meets minimum threshold for many DSCR loan programs
• 1.25+: Stronger cash flow, often associated with more favorable terms
• 1.50+: Very strong income relative to debt

While higher DSCR can improve loan terms, many investors focus on meeting the minimum threshold to expand their portfolio efficiently.

How lenders use DSCR in underwriting

Lenders use DSCR to assess whether a property can support its own financing. With DSCR-based underwriting, the focus shifts from personal income to property-level cash flow, which can simplify the process for real estate investors.

At Figure, DSCR is one of several key factors used in qualification, alongside:

• Credit score: 660+ FICO
• Loan-to-value (LTV): Up to 80% for rate-and-term or 75% for cash-out
• Property type: Single-family homes, condos, townhomes, PUDs, short-term rentals, and 2 to 4 unit properties
• Ownership: Individuals, LLCs, trusts, corporations, partnerships, and limited partnerships eligible
• Lien position: First-lien only

Together, these factors help determine eligibility, loan size, and pricing.

Important: The underwriting criteria shown are for informational purposes only and do not constitute a commitment, preapproval, or offer of credit. All applications are subject to full underwriting review, verification of information, and lender approval. Approval is not guaranteed and terms may vary.