DSCR requirements by property type
Coverage floors are not universal. The more units and the less predictable the income, the higher the bar a lender sets. Your asset class is highlighted below.
| Property type | Typical min DSCR | Illustrative rate |
|---|---|---|
| Duplex | 1.20× | 6.8% |
| Triplex | 1.20× | 6.9% |
| Fourplex | 1.25× | 7.0% |
| Single-Family Rental | 1.15× | 6.5% |
| Short-Term Rental (Airbnb) | 1.25× | 7.5% |
| Multifamily (10+ Units) | 1.20× | 6.6% |
Floors and rates are representative market norms for illustration, not a quote. Confirm the current requirement with your lender.
The fourplex coverage math
DSCR is net operating income divided by the annual mortgage payment. On a representative $350,000 fourplex at $2,600 a month rent and $9,000 of annual expenses, at 7.0% over 30 years with 25% down:
NOI = $31,200 − $9,000 = $22,200
Annual debt service = $1,746 × 12 = $20,957
DSCR = $22,200 ÷ $20,957 = 1.06×
At 1.06× against a 1.25× floor, this example misses the typical requirement. When coverage falls short, the fix is usually to lower the loan amount or raise NOI, because coverage is exactly the ratio of the two.
What moves fourplex coverage
- A larger down payment lowers the loan, which lowers the annual payment and lifts DSCR.
- A lower interest rate cuts debt service directly, the fastest lever on coverage.
- A longer term spreads principal over more years, easing the annual payment.
- Higher rent or lower expenses raise NOI, the numerator nobody can quote away.
Check the full picture with the cap rate calculator, then run your own coverage on the interactive DSCR calculator.
Frequently asked questions
4 answers, no funnel.
What DSCR does a fourplex need to qualify?
Lenders typically want at least 1.25× of debt-service coverage on a fourplex loan. Coverage is net operating income divided by the annual mortgage payment; 1.25× means the property earns 125% of what it owes each year.
How is DSCR calculated on a fourplex?
DSCR = NOI ÷ annual debt service. On a representative $350,000 deal at $2,600 a month rent and $9,000 of expenses, NOI is $22,200 against $20,957 of debt at 7.0%, a DSCR of 1.06×.
What happens if fourplex DSCR comes in below 1.25×?
A lender that requires 1.25× will usually decline or ask you to raise the down payment, pay down the rate, or bring more reserves. Lowering the loan amount lifts coverage directly, because it cuts the annual payment that divides into NOI.
Is a fourplex harder to finance than a single-family rental?
The top of the residential scale; coverage requirements tighten because the loan is underwritten more like commercial debt. Compared with a single-family rental, expect the coverage bar and the rate to move with the number of units and the income type rather than the property's size alone.