Debt Service Coverage Ratio (DSCR)
Measure commercial underwriting safety margins by comparing property Net Operating Income to mandatory debt payments.
Property Cashflow
Debt Service
Underwriting Outcome
DSCR Ratio1.33x
Annual Income:$600,000
Annual Debt Obligations:$450,000
Credit Grade: Strong / Healthy
Standard tier for multifamily and commercial bank underwriting. Property comfortably satisfies debt covenants.
Industry Debt Benchmarks
Agency Debt (Fannie Mae/Freddie Mac)1.25x Min
Commercial Banks1.20x - 1.35x
Bridge Lenders / Debt Funds1.10x - 1.15x
A higher coverage ratio indicates a wider safety margin, protecting both the commercial lender and the syndicator from adverse tenant turnover.