The ratio
The lender compares qualifying rent with the program's required housing expense. The exact numerator, denominator, appraisal rent, and minimum ratio vary by lender.
Investor Education
How DSCR loans work
A debt-service-coverage-ratio loan asks whether eligible property income supports the qualifying housing expense. It is commonly designed for investment properties rather than owner-occupied homes.
Property cash flow matters
Taxes, insurance, HOA dues, rate, loan amount, vacancy, maintenance, and rent all affect the investment, even when not every item appears in the formal ratio.
Borrower requirements remain
Credit, down payment, reserves, entity structure, experience, property type, leases, and appraisal still matter.
Run the real numbers
I will compare rent, payment, cash needed, prepayment terms, and expected operating costs before the house gets to declare itself affordable.
Written by Marta Lillard
25+ years of mortgage experience, explained in plain English.
Mortgage Broker · First Coast Mortgage Funding · NMLS #879436 · Licensed in Florida and Georgia
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