How DSCR is calculated
Gross rents (from a lease, a market rent schedule, or a short-term-rental air-form depending on the lender) are divided by principal, interest, taxes, insurance, and association dues. A DSCR of 1.00 means rent covers the payment. Many desks want 1.20 or 1.25. Some will go below 1.00 with stronger credit, more reserves, or a larger down payment. Those are overlays, not a law of nature.
Personal tax returns are often not used to calculate DTI on a true DSCR product. Credit score, first-time-investor status, number of financed properties, and cash reserves still matter. Cross-collateral and cash-out seasoning vary by lender. We put those next to a conventional investment quote before you assume Non-QM is cheaper.
What DSCR is not
It is not a primary-residence product. Occupancy misrepresentation is fraud. It is not a promise that every short-term rental in Portland, Seattle, or Vancouver, Washington will appraise to the Airbnb spreadsheet. HOA rental caps, city licensing, and rural well/septic can kill a file even when the ratio looks fine.
Prepayment penalties are common on DSCR. Interest-only periods appear on some term sheets. We will show those in dollars, not bury them in a teaser rate. Arrow shops wholesale DSCR lenders as an independent broker licensed in Oregon and Washington.