Index of entries
The DSCR encyclopedia
Short, cross-referenced entries on the vocabulary of debt-service-coverage-ratio lending. Each entry opens with a definition, then covers mechanics, common pitfalls and related terms.
- Appraisal rent schedule
An appraisal rent schedule is the section or addendum of a residential appraisal in which the appraiser analyzes comparable rentals and states an opinion of market rent for the subject property.
- DSCR ratio
The debt service coverage ratio (DSCR) is a measure of whether a rental property generates enough income to cover its own housing debt, calculated as gross monthly rent divided by the monthly principal, interest, taxes, insurance and association dues (PITIA).
- Gross rents
Gross rents are the total scheduled rental income a property produces before any deduction for vacancy, operating expenses, management or debt service.
- PITIA
PITIA is an acronym for principal, interest, taxes, insurance and association dues, representing the total monthly carrying cost of a financed property.
- Prepayment structures
A prepayment structure is the contractual term in a loan that defines whether, when and at what cost a borrower may pay off all or part of the principal before maturity.
- Reserves
Reserves are verified liquid or near-liquid assets that a borrower must hold after closing, usually expressed as a number of months of the subject property PITIA.
- Seasoning
Seasoning is the length of time that must elapse after a specified event, most often the acquisition of a property, before a lender will permit a particular transaction or rely on a particular figure.
- Vesting in an LLC
Vesting in an LLC means holding legal title to real property in the name of a limited liability company rather than in the name of one or more individuals.
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