Property Debt Service Coverage Calculator

How the property debt service coverage calculator works

The defined coverage numerator is the entered NOI less the reserve only when that treatment is selected. Debt service is the annual principal-and-interest cash payment entered for the same period. DSCR equals that defined numerator divided by debt service; cash after debt subtracts the debt payment from the same numerator.

Currency inputs round to cents first. Zero debt service gives an unavailable ratio, rather than infinite borrowing capacity. Signed NOI and negative coverage remain visible. Switching reserve treatment changes a definition; it does not decide which definition a lender or appraisal standard requires.

Property lenders use different NOI, net-cash-flow, reserve and debt-service conventions. This calculator does not reproduce a current underwriting rule, impose a qualifying minimum, determine affordability or promise loan approval. Confirm the applicable definition before entering the figures.

Worked example

Entered NOI of 100,000 less 10,000 reserves gives a defined numerator of 90,000. Against 60,000 debt service, DSCR is 1.5 and cash after debt is 30,000. Raising reserves to 20,000 reduces cash after debt to 20,000. Choosing not to deduct reserves uses the full entered NOI instead.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

• Fannie Mae: property cash-flow and DSCR definition context