Why It Matters
Even if a buyer likes a building, loan proceeds may limit what they can pay. DSCR connects the rent roll, expenses, interest rates, and buyer financing capacity.
Financing Term
Debt Service Coverage Ratio
DSCR explained for multifamily owners reviewing financing, buyer underwriting, and sale feasibility.
By Don Favia · Updated July 3, 2026
Direct Answer
Debt service coverage ratio, or DSCR, compares a property's net operating income to its debt payments. Buyers and lenders use it to understand whether income supports the loan. Weak DSCR can reduce loan proceeds, buyer demand, and sale pricing.