DSCR Calculator

What is DSCR

The Debt Service Coverage Ratio measures whether a property generates enough income to cover its debt obligations. DSCR = Net Operating Income ÷ Debt Service. A DSCR above 1.0 means the property generates enough income to cover its loan payments. Most non-QM lenders require a minimum DSCR of 1.0 to 1.25 depending on the program and property type.

DSCR Benchmarks

• Below 1.0 — property does not generate enough income to cover debt service. Most lenders will not lend.
• 1.0 to 1.1 — break-even range. Some lenders accept at higher rates or lower LTV.
• 1.1 to 1.25 — marginal but acceptable for many non-QM programs.
• 1.25 and above — generally acceptable for most lenders at standard terms.

How TROV Sizes DSCR Loans — Three Constraints Simultaneously

Most calculators let you input a loan amount or a target DSCR and show you the result. TROV sizes the loan the way a non-QM lender actually does — by computing the maximum loan amount under three separate constraints simultaneously and identifying which one is the binding factor.

• DSCR floor — the maximum loan amount where NOI divided by the monthly payment is at or above your required DSCR minimum.
• LTV cap — the maximum loan amount as a percentage of the purchase price.
• Debt yield minimum — the maximum loan amount where annual NOI divided by the loan amount meets the lender minimum debt yield.
• The actual loan amount is the minimum of all three. TROV identifies which constraint is binding and tells you exactly why your loan is limited to that amount — which is what a lender will tell you when they decline your requested loan size.

Why the Binding Constraint Matters

Knowing which constraint is limiting your loan changes your strategy. If the debt yield is the binding constraint adding more equity will not help — you need higher NOI. If the LTV is the binding constraint a larger down payment solves it. If the DSCR is the binding constraint rent growth or expense reduction is the path forward. TROV gives you this diagnosis automatically so you are not guessing why a deal does not size the way you expected.