One formula drives most investor loan decisions: gross monthly rent divided by total PITIA. Here is exactly how lenders build that number on Indiana rentals.
DSCR = Gross Monthly Rent ÷ Total Monthly PITIA. PITIA is principal, interest, taxes, insurance, and HOA when the property has dues.
Lenders care about coverage — whether the asset pays for itself — not your personal W-2 income. A clean calculation with the right rent source and full PITIA is what clears underwriting.
Guidelines vary by investor. We confirm the final ratio against live program rules before you rely on a pre-approval.
Worked example
Follow the same order underwriters use so your estimate matches the file.
Use the lease in place, appraisal market rent, or program-allowed STR income. Do not net out vacancies or repairs unless the investor requires it.
Principal and interest from the proposed loan, plus monthly taxes, insurance, and HOA. Missing taxes or HOA inflates DSCR and fails underwriting later.
Gross rent ÷ PITIA = DSCR. Round consistently with the investor's worksheet — we reconcile the final ratio in your file.
Compare your result to investor floors (often 1.0+). Below-minimum ratios may still work with more down payment, a different rate, or another product.
Small input errors swing the ratio enough to miss investor minimums.
Using P&I alone overstates DSCR. Always include taxes, insurance, and HOA when they apply.
Underwriters use lease, market rent, or documented STR history — not the rent you hope to charge after renovations unless the program allows it.
Both rent and PITIA must be monthly. Annual tax ÷ 12, not annual ÷ annual.
A different rate changes P&I and the ratio. Recalculate when you lock or change loan amount.
Related DSCR guides and investor resources from Ryan & Steve.
What Debt Service Coverage Ratio stands for and how lenders interpret it.
Typical minimum ratios and when sub-1.0 programs may apply.
Run rent-vs-payment numbers before you write an offer.
Full program hub with benefits, eligibility, and next steps.
2MG Daily
Recent articles on DSCR financing, rental investing, and Indiana market insights.
Aug 7, 2026 • 2MG Daily
Read article →
Aug 18, 2026 • 2MG Daily
Read article →
Divide the property's gross monthly rent by total monthly PITIA (principal, interest, taxes, insurance, and HOA when applicable). Example: $2,200 rent ÷ $1,900 PITIA = 1.16 DSCR.
Programs may use an in-place lease, appraisal market rent, or documented short-term rental history. The allowed rent source depends on the investor and property type.
Yes when the property has HOA dues. Taxes and insurance must also reflect the subject property — not a generic estimate.
Yes. Use our DSCR calculator with estimated rent and payment, then we refine the ratio with appraisal, tax, and insurance figures from your file.
Ryan & Steve will build the ratio with real taxes, insurance, and rent docs — or start with the calculator.