DSCR — debt service coverage ratio — is a rental property's net operating income divided by its annual debt service. A DSCR of 1.0 means the property exactly covers its loan payments; below 1.0 it runs at a shortfall.
Most DSCR lenders want at least 1.20 to 1.25, which leaves a cushion for vacancy and repairs. Some programs accept 1.0 or even sub-1.0 with a rate premium and larger down payment.
The ratio is what makes a DSCR loan different from a conventional mortgage: qualification rests on the property's cash flow, not your personal income, so investors with many properties or write-offs can still borrow.