DSCR Term Loans for Stabilized Properties
DSCR Term Loans For Commercial Real Estate
Long term senior debt sized to cash flow for stabilized properties. Proceeds set by Debt Service Coverage Ratio and capped by Loan To Value. Non recourse options, predictable amortization, and a closing checklist that holds.
A DSCR loan is permanent financing that uses property cash flow to determine loan proceeds. Lenders compare annual Net Operating Income to annual debt service and set a minimum ratio. If the floor is 1.30 times, every dollar of scheduled payment must be covered by one dollar and thirty cents of income. Final dollars to borrower equal the lower of the DSCR amount and the value based limit. This approach supports stable leverage, protects coverage, and delivers durable terms for sponsors.
What DSCR Means For Sponsors
Debt Service Coverage Ratio equals Net Operating Income divided by annual debt service. The higher the ratio, the stronger the coverage. DSCR underwriting produces loan proceeds that match real cash generation. It also drives pricing, interest only allowances, reserve sizing, and covenant tests through the life of the loan.
- Consistent framework across banks, agencies, life companies, CMBS, and private credit
- Transparent against audited income statements and third party reports
- Supports interest only periods when coverage is strong
- Clear monitoring through quarterly and annual financials
Typical DSCR Loan Terms
Core Underwriting Inputs
- Twelve month trailing income and expense statement and a current rent roll
- Forward looking budget, capital plan, and reserve schedule
- Appraisal, property condition, and environmental reports or order ready
- Sponsor net worth and liquidity that align with lender policy
DSCR Proceeds Calculator
Execution And Closing Process
- Screening. We review income, leases, sponsorship, and market data. We run DSCR, debt yield, and value size tests.
- Mandate And Term Sheet. We align program, pricing, and prepayment. We set a clear checklist and closing timetable.
- Diligence And Approvals. Appraisal, property condition, environmental, legal, and credit approvals are coordinated end to end.
- Funding. Documents are executed, conditions to fund are ticked off, and proceeds are disbursed as agreed.
Client Reviews
Financely sized our multifamily refinance precisely to DSCR and value. Term sheet matched the model, and closing ran to the day. Clear, disciplined, and data driven.
Our industrial portfolio received a non recourse takeout sized on a 1.35 times DSCR. The underwriting memo and checklist gave lenders what they needed on first pass.
The DSCR model matched the commitment. No surprises at closing. We will mandate Financely on our next multifamily term loan.
Frequently Asked Questions
How do lenders size a DSCR loan
Lenders divide Net Operating Income by a target DSCR to set the maximum annual payment. They convert that payment into a loan amount using the rate and amortization. Proceeds are the lower of this amount and the LTV cap.
Can I obtain interest only
Many programs offer partial or full term interest only when coverage, tenancy, and sponsorship are strong. DSCR and debt yield drive the allowance.
What drives pricing
Leverage, DSCR cushion, property quality, market depth, lease duration, and sponsor track record drive spreads and fees. Program type also matters.
Which documents speed approval
A clean T 12, current rent roll, service contracts, insurance, recent appraisal and reports, and a short sponsor bio with assets under management reduce cycles and help credit teams clear conditions faster.
Share asset type, NOI, value or cap rate, target DSCR, and rate view. We will size proceeds and present lender options that fit your objectives.
Start Your DSCR Loan ProcessFinancely Group acts as an advisor and arranger through regulated partners. Terms remain subject to KYC, AML, sanctions screening, valuation, third party reports, and lender approval. Nothing here is a commitment to lend.
Get Started With Us
Submit Your Deal & Receive a Proposal Within 1-3 Working Days
Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.
All submissions are
promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.
Thank you for considering working with us. A nominal fee of US$500 is required upon completion of each form. This fee covers the time and effort we invest in reviewing your submission and crafting a thorough proposal. We receive numerous inquiries and prioritize those that carry this fee, ensuring serious applicants receive prompt attention.
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