DSCR Loan Eligibility 1.25 Coverage Calculator 2027

Calculate DSCR (Debt Service Coverage Ratio) for investment property 2027 — most lenders require 1.20-1.25 minimum. No personal income verification needed.

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What is DSCR Loan

Investment property loan where qualification based on PROPERTY income (rent), not borrower personal income. Designed for self-employed investors who can't show W2. No tax returns required.

DSCR Formula

Monthly Gross Rent / Monthly PITI (Principal + Interest + Tax + Insurance). DSCR ≥ 1.0 = rent covers payments exactly. ≥ 1.25 = rent exceeds payments by 25% (cushion for vacancy).

Lender Requirements

Standard: 1.20-1.25 DSCR. 20-25% down (15% in some programs with higher rate). 660+ FICO. Reserves: 6 months PITI per property. Rates: 1-2% higher than primary residence.

Negative DSCR Strategy

DSCR <1.0 = property loses money monthly. Lenders rarely approve. To improve: raise rent (turnover), refinance to lower rate, add bigger down payment, buy in higher-rent market.

Source: Fannie Mae Selling Guide B3-4.3-04, lender DSCR program guidelines. Last updated: May 2026.