Before you apply, know whether a rental property’s income is likely to support a DSCR loan — and what to change if it doesn’t. Underlytix runs the number against real lender thresholds in about 60 seconds.
A DSCR (debt service coverage ratio) loan qualifies the property, not your personal income. The lender divides the property’s net operating income by its debt service; the resulting ratio decides the deal. Most DSCR lenders want 1.20–1.25, some accept 1.0, and a few go below 1.0 at lower leverage and higher cost. “Readiness” is knowing where a property lands on that scale — and what moves it — before you apply. The full mechanics are in the DSCR guide.
Projected rent minus a realistic vacancy factor — not your best-case pro forma. Optimistic rent is the most common reason a “ready” deal fails underwriting.
Principal, interest, taxes, insurance, and association dues — the payment most DSCR programs actually test against.
Your DSCR plus what changes it: down payment, rents, expenses, or amortization. Then match it to a program in lender-fit analysis.
| DSCR | Readiness | Typical outcome |
|---|---|---|
| 1.25+ | ✓ Ready | Broad lender pool, best pricing |
| 1.20–1.24 | ✓ Ready | Meets common minimums, standard terms |
| 1.00–1.19 | Adjust | Case-by-case; rate add-ons, reserves, or more down |
| Below 1.00 | ✗ Not yet | Declined by most; a few allow it at 65–70% LTV, premium pricing |
Result: Ready — DSCR 1.27. Market rent $2,150, vacancy factor applied, PITIA $1,690. Ratio clears the 1.25 tier for best pricing. Flag: a short-term rental strategy could raise gross income but changes the lender’s underwriting — compare it in short-term vs long-term rental analysis before you decide. For the full deal picture, run investor financing analysis.
Underlytix models DSCR against lender-style assumptions so you submit rental deals that are positioned to pass — not ones that fail on the vacancy factor.