Lending & investment · Defined
Debt-service coverage ratio (DSCR)
A ratio comparing defined property income with required debt service over a stated period. It is used to evaluate the income available to support loan payments.
Why it matters
Income adjustments, reserves, and the debt-service calculation vary by underwriting method. Construction progress is not proof that projected occupancy or operating income has been achieved.
In practice
A project example
A completed building can still fall short of its projected coverage ratio while leasing is underway.
General educational guidance from KOW Building Consultants. Examples are illustrative, not project records. The applicable contract, standard, program, and jurisdiction control the requirements for a specific assignment.