DSCR

DSCR mortgage, also known as Debt Service Coverage Ratio mortgage, is a type of commercial mortgage loan that is primarily based on the property's ability to generate enough income to cover the loan payments. Unlike a traditional residential mortgage, which is typically based on the borrower's creditworthiness and income, a DSCR mortgage relies on the property's income potential and cash flow.

The debt service coverage ratio is a financial metric used to assess the property's ability to generate enough cash flow to cover the mortgage payments. The ratio is calculated by dividing the net operating income (NOI) of the property by the total amount of the annual mortgage payments. A higher DSCR indicates a lower risk to the lender, as there is a greater likelihood that the property will generate enough income to cover the loan payments.

DSCR mortgages are commonly used to finance commercial real estate properties, such as office buildings, apartment complexes, and retail centers, where the property's income potential is a critical factor in the borrower's ability to repay the loan