A DSCR loan, is a loan designed to qualify a property’s income instead of the borrower’s. DSCR is an acronym for Debt Service Coverage Ratio. If this ratio is > 1.00, the property can pay for itself. The DSCR is found by taking the net operating income of the property (income - taxes & insurance) and divide it by the mortgage pmt (e.g. :debt service”). Thus, the goal is to see if the income “covers” the “debt to be serviced”.

Income is determined by appraisal.

Terminology Page. Subpage of wiki.