The following explains the various factors that play into the concept of a DSCR Loan

A DSCR loan refers to financing that considers the Debt Service Coverage Ratio (DSCR) in its evaluation. DSCR is a financial metric used in commercial real estate loans to assess a property's ability to cover its debt payments. Lenders use the DSCR to determine the property's financial health and its capacity to service the loan. A higher DSCR, indicating more income relative to debt obligations, is typically favorable for loan approval. DSCR loans are common in commercial real estate, where the property's income is crucial in evaluating its eligibility for financing.