DSCR & Cash Flow

Interest-Only (I/O) 40-Year & 30-Year DSCR Structure

A DSCR loan featuring an initial 10-year interest-only period followed by a 20-year or 30-year principal amortization schedule.

Underwriting Formula / Rule

IO DSCR = Gross Monthly Rent ÷ Monthly ITIA (Interest + Taxes + Insurance + HOA).

Detailed Credit-Committee Impact & Thresholds

By removing principal amortization during the first 10 years, an Interest-Only DSCR loan lowers monthly debt service (ITIA) and increases the property’s DSCR ratio—often unlocking higher maximum loan proceeds on tight cash-flowing assets.

2026 Wholesale Benchmark: 30-Year (10-Yr IO + 20-Yr Amort) and 40-Year (10-Yr IO + 30-Yr Amort) available across wholesale shelves.

Related Underwriting Terms

Debt Service Coverage Ratio (DSCR)Form 1007 Single-Family Comparable Rent Schedule Form 1025 Small Residential Income Property Appraisal Report 5-4-3-2-1 Step-Down Prepayment Penalty 3-2-1 Step-Down Prepayment Penalty Yield Maintenance Prepayment Provision