{
  "slug": "dscr-loan-sizing",
  "title": "DSCR Loan Sizing Calculator",
  "heading": "DSCR Loan Sizing Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/dscr-loan-sizing",
  "summary": "Find the max loan a DSCR lender will approve based on property cash flow.",
  "description": "DSCR (debt service coverage ratio) loans qualify borrowers on the property's rental income rather than personal income, which is why they dominate investor lending today. The lender divides annual net operating income by the annual debt service (principal + interest, sometimes plus taxes, insurance, and HOA depending on the lender's definition) and requires that ratio to hit a minimum, commonly 1.20-1.25x, sometimes 1.0x for aggressive programs at a rate premium. This calculator works backward: given the property's rent, operating expenses, the lender's minimum DSCR, and your rate and term, it solves for the maximum annual debt service the income supports, then converts that into a maximum loan amount. It's the tool to run before you fall in love with a property, because a strong purchase price doesn't matter if the rent can't support financing at the required ratio — you'll either need a bigger down payment or a different property.",
  "formula": "Max annual debt service = NOI ÷ Minimum DSCR; Max loan = Max annual debt service solved against amortizing payment formula for rate and term.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=dscr-loan-sizing",
  "inputs": [
    {
      "id": "monthlyRent",
      "label": "Monthly gross rent",
      "kind": "number",
      "hint": null,
      "default": 2800,
      "unit": "$",
      "min": 1,
      "max": null
    },
    {
      "id": "monthlyOpex",
      "label": "Monthly operating expenses (taxes, insurance, HOA, mgmt, reserves)",
      "kind": "number",
      "hint": null,
      "default": 900,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "minDscr",
      "label": "Lender's minimum DSCR",
      "kind": "number",
      "hint": null,
      "default": 1.25,
      "unit": null,
      "min": 0.75,
      "max": 2
    },
    {
      "id": "rate",
      "label": "Interest rate",
      "kind": "number",
      "hint": null,
      "default": 7.25,
      "unit": "%",
      "min": 1,
      "max": 15
    },
    {
      "id": "termYears",
      "label": "Amortization term",
      "kind": "number",
      "hint": null,
      "default": 30,
      "unit": "years",
      "min": 5,
      "max": 40
    }
  ],
  "outputs": [
    {
      "id": "maxLoan",
      "label": "Maximum loan amount supported",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "maxMonthlyDebtService",
      "label": "Max monthly payment (P&I)",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "annualNoi",
      "label": "Annual net operating income",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "noiMonthly",
      "label": "Monthly net operating income",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Monthly gross rent: 2800 $",
      "Monthly operating expenses (taxes, insurance, HOA, mgmt, reserves): 900 $",
      "Lender's minimum DSCR: 1.25",
      "Interest rate: 7.25 %",
      "Amortization term: 30 years"
    ],
    "outputs": [
      "Maximum loan amount supported: $222,816",
      "Max monthly payment (P&I): $1,520",
      "Annual net operating income: $22,800",
      "Monthly net operating income: $1,900"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter monthly gross rent ($).",
      "Enter monthly operating expenses (taxes, insurance, hoa, mgmt, reserves) ($).",
      "Enter lender's minimum dscr.",
      "Enter interest rate (%).",
      "Enter amortization term (years).",
      "Read your maximum loan amount supported on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "monthlyRent": 1700,
        "monthlyOpex": 550,
        "minDscr": 0.75,
        "rate": 7.25,
        "termYears": 18
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "monthlyRent": 2800,
        "monthlyOpex": 900,
        "minDscr": 1.25,
        "rate": 7.25,
        "termYears": 30
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "monthlyRent": 4500,
        "monthlyOpex": 1450,
        "minDscr": 2,
        "rate": 7.25,
        "termYears": 40
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What counts in the lender's operating expense figure for DSCR?",
      "a": "Most DSCR lenders use PITIA — principal, interest, taxes, insurance, and association dues — as the debt service denominator, not your full operating expense list including management and maintenance. This calculator uses your full opex figure to be conservative; check your specific lender's worksheet since some are more generous."
    },
    {
      "q": "What DSCR ratio gets the best rate?",
      "a": "1.25x and above typically gets the best pricing tier; 1.0-1.24x is fundable at most DSCR shops but with a rate add-on of roughly 0.25-0.5%; below 1.0x ('no ratio' loans) exists but at meaningfully worse pricing and lower max LTV."
    },
    {
      "q": "Can I use market rent instead of actual lease rent?",
      "a": "Yes, if the property is vacant or the current lease is below market, lenders typically use an appraiser's rent schedule (Form 1007) rather than the trailing lease. Use whichever is lower between market rent and your actual signed lease if the property is currently occupied, since that's what most underwriters do."
    },
    {
      "q": "Why is DSCR loan qualifying popular with investors?",
      "a": "It skips personal income, tax returns, and debt-to-income calculations entirely, letting investors scale past the 10-property limit and DTI ceilings that Fannie/Freddie conventional loans impose. The tradeoff is higher rates, typically 0.5-1.5 points above conventional, and prepayment penalties on many programs."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/brrrr-refinance-capture",
    "https://www.revenuelab.fyi/toolbox/hard-money-bridge-cost",
    "https://www.revenuelab.fyi/toolbox/seller-financing-note-yield"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — DSCR Loan Sizing Calculator (https://www.revenuelab.fyi/toolbox/dscr-loan-sizing)"
}