DSCR Calculator AI
The Debt Service Coverage Ratio (DSCR) measures whether a property generates enough income to cover its debt obligations. Lenders typically require a minimum 1.25x DSCR for commercial loans. The CRE Analyst Agent calculates DSCR instantly and shows how different financing scenarios affect your coverage ratio.
Formula
DSCR = Net Operating Income / Annual Debt Service
Why It Matters
DSCR determines whether you can get financing and at what terms. A 1.0x DSCR means the property barely covers its debt. Most lenders require 1.20-1.35x minimum. Higher DSCRs unlock better rates and terms.
How AgentErgon Helps
Enter your property NOI and loan terms, and the CRE Analyst Agent calculates DSCR instantly. It shows how different loan amounts, interest rates, and amortization periods affect your coverage ratio and helps you optimize your capital structure.
Frequently Asked Questions
What DSCR do lenders typically require?+
Most commercial lenders require 1.20-1.35x minimum. SBA loans often require 1.15-1.25x. The higher your DSCR, the better your loan terms.
Can it model different financing scenarios?+
Yes. Compare different loan amounts, interest rates, and terms side by side to find the optimal financing structure.
How does DSCR affect loan terms?+
Higher DSCR means lower risk for the lender, which translates to lower interest rates, higher LTV ratios, and more favorable terms.
What if my DSCR is below the minimum?+
The AI shows how much additional NOI you need, what rent increases would achieve it, or how adjusting the loan amount brings DSCR into compliance.
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