Dscr Loans is determined from the ratio of the net operating income noting the amount of loan commitments due in a year known as total debt service. For instance, if, in a property, the net annual income fetches $100,000 and the annual loan payment totals $80,000, then DSCR will be 1.25. This means that the property not only earns a quarter more revenues than it required for debt repayment, which makes it safer for the lenders to invest in. A DSCR below 1 indicates that the property is not producing enough income to meet its interest and/ or lease expenses.
