Debt Service Coverage Ratio
What is DSCR?
Debt Service Coverage Ratio (DSCR) is a metric used to evaluate the subject property's gross rental income to the property's monthly mortgage payment. When obtaining financing, DSCR is a key indicator to determine if there is enough cash flow to repay the debt.

With Champion Funding's DSCR loan programs, investors can use the property's income to qualify, rather than the borrower's personal finances.
Turn Cash Flow into Funding

Advantages of DSCR at ChampsTPO

No Income / Employment Verification - DSCR is used for qualifying
Minimum DSCR .75, No Ratio available
Quicker closing, No TRID Disclosures or required wait periods
Close in as little as 5-Business Days with an eligible transferred appraisal (available on some loan programs)
How to Calculate DSCR

When the property is cash-flowing, it is important to keep in mind that there are three various ways of calculating the DSCR.

How to Calculate INTEREST ONLY DSCR
Debt Service Coverage Ratio equals Monthly Gross Income Divided by ITIA
Example: $6,000 monthly gross rent income
Divided By Icon
$4,800 monthly ITIA = 1.25 DSCR

The need for Non-QM is here. Don't miss out!

There is no shortage of demand in the market for increasingly flexible financing options for responsible borrowers with fluctuating, limited, or no income documentation. Become an approved Broker Partner and start growing your pipeline today.
How to Calculate Airbnb STR VACATION RENTAL DSCR
Debt Service Coverage Ratio Equals Refinance Only = (12 month history x .80) divided by PITIA
Example: $7,650 monthly gross rent income
Divided By Icon
$4,250 monthly PITIA = 1.8 DSCR
How to Calculate DSCR
Debt Service Coverage Ratio  equals Monthly Gross Rental Income divded by PITIA
Example: $6,000 monthly gross rent income
Divided By Icon
$5,000 monthly PITIA = 1.2 DSCR
See guidelines for full eligibility.
* Gross Rents are the lower of either the actual rents from lease agreements or Fannie Mae Form 1007/1025 from the property appraisal. If the lease agreement reflects higher rents than Form 1007/1025 the lease amount may be used for gross rents if two (2) months’ proof of receipts is verified.
**PITIA – Principal and Interest payment amortized over the scheduled term. Interest Only – ITIA.
No Ratio = No Minimum DSCR

DSCR No Ratio Loan Options Available

We have options to qualify your DSCR loans regardless of the ratio. Whether its greater than 1, between .75 and .99, or even below .75, we have a route to help get your borrower to the closing table! Qualifying for this loan type doesn't rely on the borrowers to disclose their debts or income (no DTI calculations required). 

Qualify your borrowers using the earning potential of their property instead of their personal income.
Equal Housing Opportunity.
© 2024 All Rights Reserved. For industry professionals only and is not an advertisement to extend credit directly to consumers. For licensing, visit nmlsconsumeraccess.org. The information contained herein is provided to assist real estate and mortgage lending professionals and is not an advertisement to extend credit directly to consumers. Champions Funding LLC. 365 E. Germann Rd., Suite 140 Gilbert, AZ 85297. NMLS #2254210.
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