And how to boost yours for better approvals and lower rates.

When it comes to qualifying for a DSCR loan, the Debt Service Coverage Ratio is the single most important number in the entire process.

But what is a “good” DSCR ratio?

👉 The answer depends on your goals, your strategy, and the lender — but understanding this one number can help you:

• Get better loan terms
• Qualify for more properties
• Scale your rental portfolio faster

Let’s break it down in plain language — and show you how to improve your DSCR and unlock stronger deals.

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✅ What Is DSCR?

DSCR = Gross Monthly Rent ÷ Monthly Mortgage Payment

It tells lenders one thing:

Does the rental income from the property cover the loan payment?

• DSCR of 1.00 = Break-even
• Above 1.00 = Positive cash flow
• Below 1.00 = Negative cash flow (but still potentially approvable)

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🔢 What Is Considered a “Good” DSCR Ratio?

DSCR Ratio	What It Means	Typical Outcome
1.25+	Strong cash flow	Best rates, easier approval
1.10–1.24	Good cash flow	Approved with solid credit
1.00–1.09	Breakeven	May need reserves or higher down payment
0.75–0.99	Slight shortfall	Risk-based pricing, compensating factors
Below 0.75	Negative cash flow	May not qualify for DSCR (consider other options)

Most DSCR lenders look for 1.00 or better, but some will allow ratios as low as 0.75 depending on your:

• Credit score
• Loan-to-value (LTV)
• Experience as an investor
• Cash reserves

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🧠 What Impacts DSCR?

📈 1. Rental Income

This can come from:

• A signed lease
• Rent estimate from the appraisal
• Short-term rental projections (AirDNA, etc.)

💡 Higher rent = higher DSCR.

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📉 2. Mortgage Payment

Includes:

• Principal
• Interest
• Taxes
• Insurance
• HOA dues (if applicable)

💡 Lower monthly payment = higher DSCR.

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🛠️ 3. Property Type

Multi-units tend to produce higher income vs. single-family homes.
Short-term rentals can generate more rent — but may require Airbnb underwriting instead of traditional DSCR.

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🧾 How to Improve Your DSCR (Fast)

✅ Buy in high-rent markets
✅ Increase your down payment to reduce your loan amount
✅ Negotiate a better purchase price
✅ Reduce property expenses like HOA fees or insurance
✅ Improve rentability (minor upgrades, better marketing)

We’ll help you estimate DSCR before you even make an offer — so you know whether it qualifies before you waste time or money.

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🏢 Why PRMI?

At PRMI, we don’t just approve loans — we help you optimize deals.

With DSCR loans, we:

• Calculate ratios upfront with no surprises
• Offer 30-year fixed, ARM, and interest-only options
• Help first-time investors qualify and scale
• Handle everything in-house so you can close with confidence

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👇 Want to Know If Your Property Hits the Right DSCR?

Let’s run the numbers and help you hit 1.00+ — or show you how to bring the deal together even if it doesn’t.