NewMeet Cai — Your AI Asset Management & Analyst TeamLearn more
BubbleGum BI Logo

Debt Service Coverage Ratio Calculator

Calculate your property's DSCR instantly. Understand how lenders evaluate your multifamily asset's ability to cover debt obligations.

Calculate DSCR

Total revenue minus operating expenses, excluding debt service

$

Total annual mortgage payments (principal + interest)

$

Result

Enter NOI and debt service to calculate your DSCR

DSCR Benchmarks for Multifamily

< 1.00x
Below Breakeven
1.00 - 1.15x
Marginal
1.15 - 1.25x
Acceptable
1.25 - 1.50x
Strong
> 1.50x
Excellent

Most Fannie Mae and Freddie Mac multifamily loans require a minimum 1.20x - 1.25x DSCR. Bridge and construction loans may have different thresholds.

How DSCR Is Calculated

DSCR = Net Operating Income / Annual Debt Service

Net Operating Income (NOI)

Total revenue from the property minus all operating expenses. Operating expenses include property management, maintenance, insurance, taxes, and utilities — but exclude debt service payments.

NOI = Gross Revenue - Operating Expenses

Annual Debt Service

The total of all principal and interest payments on the property's mortgage over 12 months. If the loan has an interest-only period, only interest payments are included during that time.

Annual Debt Service = Monthly P&I Payment x 12

Why DSCR Matters for Multifamily

Loan Qualification

Lenders use DSCR as a primary underwriting metric. A higher DSCR often means better loan terms, lower rates, and higher LTV allowances.

Portfolio Monitoring

Tracking DSCR across your portfolio surfaces properties at risk before they become problems. Even a 0.05x shift can signal trouble.

Value-Add Decisions

DSCR helps evaluate whether a renovation or rate increase will meaningfully improve a property's debt coverage position.

This calculator shows one property.
Cai shows your entire portfolio.

BubbleGum BI calculates DSCR across every property in your portfolio — updated daily, with trend analysis and threshold alerts. See which assets need attention before lenders do.

Schedule a Demo

Want to go deeper? Read our comprehensive DSCR guide for lender thresholds, covenant structures, and strategies to improve debt service coverage across your portfolio.

Frequently Asked Questions

What is a good DSCR for a multifamily property?
Most lenders consider a DSCR of 1.25x or higher to be strong for multifamily properties. Agency lenders like Fannie Mae and Freddie Mac typically require a minimum of 1.20x to 1.25x. Bridge lenders may accept lower ratios for value-add deals with clear upside.
What is the difference between DSCR and debt yield?
DSCR measures the ratio of NOI to debt service payments, showing how many times over income covers debt obligations. Debt yield measures NOI as a percentage of total loan amount (NOI / Loan Amount), providing a property-level return metric independent of loan terms. Lenders often use both.
How can I improve my DSCR?
Increase NOI by raising rents, reducing vacancy, or cutting operating expenses. You can also reduce debt service by refinancing at a lower rate, extending the amortization period, or paying down principal. BubbleGum BI helps identify which levers move the needle most across your portfolio.
Does this calculator account for reserves or capital expenses?
This calculator uses the standard DSCR formula (NOI / Annual Debt Service). Some lenders underwrite with replacement reserves or capital expenditures deducted from NOI. Check with your lender on their specific NOI definition for underwriting purposes.
How often should I monitor DSCR?
For active portfolio management, monthly monitoring is ideal. DSCR can shift quickly with seasonal vacancy patterns, rent concessions, or unexpected maintenance costs. BubbleGum BI tracks DSCR daily across your entire portfolio with automated alerts when properties approach covenant thresholds.