DSCR Loans

Underwriting doesn’t use your best month.

Zoning decides which path applies before any number gets calculated.

It qualifies on a 12-month average, then divides by 12.

That means the appraiser’s long-term market-rent figure, not a seasonal STR projection, drives the coverage ratio.

That rent gets divided by the full monthly housing cost — principal, interest, taxes, insurance, and any HOA dues — to produce a coverage ratio.

Leverage steps down as the loan gets bigger — 80% near $1,000,000, down to 60% territory above $4,000,000 on case-by-case review.

Luxury Rental DSCR Loans In Islamorada — A DSCR loan sizes and prices off the property’s rental income, not the buyer’s tax returns.

The mechanics below walk through how that math works, where it breaks, and what an investor decision actually looks like.

Freddie Mac runs a matching cap. Once a borrower hits that number, conventional purchase financing stops, regardless of income, credit, or reserves.

On a long-term lease, that number comes from an appraisal rent schedule.

There’s no federal agency that defines “super jumbo” for a DSCR loan.

Reserves, not the ratio itself, are what actually protect the file against a slow January.