| The formula | Qualifying monthly rent ÷ monthly PITIA = DSCR |
| PITIA | Principal, interest, taxes, insurance and association dues |
| Program Calculator | You supply the loan amount; it returns the ratio, with program rules applied unit by unit |
| Loan calculator | You supply a target ratio; it sizes a loan against the rent |
| Expenses | The Program Calculator takes monthly figures. The loan calculator takes annual taxes and insurance |
| What neither is | An approval. Credit, reserves and property condition sit outside the arithmetic |
Short answer: a DSCR calculator divides the rent a lender will actually count by the full monthly housing payment on the loan you are asking for. Stonehaven publishes two. The DSCR Program Calculator applies program rules to your rent unit by unit and returns the ratio for a loan amount you specify. The DSCR loan calculator works the other direction and sizes a loan against a target ratio. Neither is an approval. Both are the arithmetic a broker runs before anything else happens.
The formula both tools use
For one-to-four unit rentals the convention is qualifying monthly rent divided by monthly PITIA, which is principal, interest, taxes, insurance and association dues. The critical rule is that the numerator and the denominator must cover the same period. A monthly rent figure divided by an annual payment figure produces a number that means nothing. Both tools handle the conversion internally, but they ask for expenses differently, which is the single most common source of a wrong answer.
Walking the DSCR Program Calculator
Use this tool when you know the loan amount you want and you need the ratio a program would actually compute.
Property type
Four choices: 1–4 unit rental, Short-term rental, Condotel, and 5–8 units. This is not cosmetic. Each one changes how your rent is treated. A condotel takes an 80 percent haircut on both purchase and refinance. A short-term rental is qualified on market rent on a purchase. The unit schedule expands to 1 through 4 units for the first three types and 5 through 8 for the last.
Transaction
Purchase or Refinance. Several rules exist on only one side. The 115 percent allowance for a lease above market applies on refinances, not purchases. Vacant units are not permitted on a one-to-four unit refinance at all. The full rule set is covered in which rent a DSCR program actually counts.
Property value and Loan amount
Enter the value the lender is likely to accept, not your optimistic number. On a purchase that is generally the lower of the contract price and the appraised value, subject to program rules. On a refinance it is the appraised value, and programs commonly apply a seasoning rule that can force a recently purchased property to be valued at cost for a period. Loan amount is what you are requesting. The tool divides the two and displays LTV. It does not cap the loan for you, so an LTV above what a program allows will still compute a ratio. Treat the LTV output as information, not permission.
Interest rate
Your own rate estimate. The calculator has no rate sheet inside it and does not quote pricing. If you do not have a quote, use a figure you can defend and change it to see how sensitive the deal is. Every number in this article uses 7.25 percent as an illustrative rate only. It is not a quote, not an offer, and not a rate available to anyone.
Amortization
Six options, covering 30-year fixed, a 5/6 ARM, and four structures with a 10-year interest-only period on a 30-year or 40-year basis. The two amortizing options qualify on a 30-year payment. Every 10-year interest-only option qualifies on the interest-only payment, which is the balance times the rate divided by 12. That is why switching to interest-only can lift a ratio without changing the rent.
First-time investor
Yes or No. In the rules this calculator models, a first-time investor case needs a ratio of at least 1.00, and no-ratio treatment is not available. Whether a given lender agrees is a question for the lender.
Unit schedule
Set the number of units, then fill each row. Depending on property type and transaction you will see Market rent, Current rent, Rent receipt, Vacant, and for short-term rentals and condotels on a refinance, a 12-month short-term rental history. Here is where each number comes from.
| Field | Where the number comes from |
|---|---|
| Market rent | The appraiser's comparable rent schedule, Form 1007 for a single unit or Form 1025 for two to four units. Before you have an appraisal, a defensible estimate from comparable rented properties. |
| Current rent | The signed, in-place lease. Not the asking rent and not a proposed lease. |
| Rent receipt | Whether you can document that the tenant actually pays the lease amount, usually bank deposits or a rent ledger. |
| Vacant | Whether the unit is unoccupied at application. |
| 12-month history | The trailing twelve-month average from a third-party management platform or provider statement, not your own spreadsheet. |
Every one of those fields is a document, not an opinion. Gather them before you type.
Monthly property expenses
Four fields, all monthly: hazard insurance, real-estate taxes, common charges and ground rents. This is where most errors happen. The page notes that for a purchase in California or new construction you can use 1.25 percent of the sale price divided by 12 as a tax placeholder. Everywhere else, take the annual figure and divide by 12 before typing it.
Reading the output
Six results plus flags: your DSCR, qualifying rent, qualifying payment, taxes and insurance and charges, the full monthly payment, and LTV. Compare qualifying rent against the rent you expected. If it is lower, the program discounted it and the reason is in the rules. Flags call out program limits such as vacant units on a refinance or a loan below the minimum.
Walking the DSCR loan calculator
The DSCR loan calculator answers the opposite question: what does the rent support? Its inputs are purchase price, down payment as a percentage, an interest rate estimate, monthly rent, annual taxes, annual insurance, monthly association dues, and a target DSCR for sizing.
Note the differences. This tool takes a down payment percentage rather than a loan amount, and it takes annual taxes and insurance while the Program Calculator takes monthly. Its sizing outputs are the rent needed at your target, the maximum principal and interest at your target, and an illustrative maximum loan. It runs on a 30-year amortization.
One caution on that maximum loan output. It is derived from the rent at your chosen ratio. It is not the lesser of that figure and the program's LTV ceiling, and it does not know your credit, reserves or loan minimums. The loan you can actually get is the most restrictive of all of those limits, never just the ratio-derived one.
A hypothetical worked example
Assumptions, all hypothetical: a single rental unit, purchase, property value $320,000, loan amount $240,000, illustrative rate 7.25 percent, 30-year fixed, market rent $2,400 a month, hazard insurance $150 a month, real-estate taxes $310 a month, no common charges or ground rents.
| Step | Figure |
|---|---|
| Qualifying rent | $2,400.00 |
| Qualifying payment, principal and interest | $1,637.22 |
| Taxes, insurance and charges | $460.00 |
| Full monthly payment (PITIA) | $2,097.22 |
| DSCR ($2,400.00 ÷ $2,097.22) | 1.14x |
| LTV ($240,000 ÷ $320,000) | 75% |
Now the error. Type the same taxes and insurance as annual figures, $3,720 and $1,800, into the monthly fields. PITIA becomes $7,157.22 and the ratio collapses to 0.34x. Nothing about the property changed. If your result looks absurd, check those two fields first.
The same property in the other tool takes $3,720 of annual taxes, $1,800 of annual insurance, and a 25 percent down payment.
What the result does not tell you
A ratio above 1.00 is a lender test, not an investment verdict. Rent minus PITIA is not your cash flow. Vacancy, management, maintenance, capital reserves and leasing costs all come out of the same rent and none of them appear in the formula. The deal review models both views deliberately, because a property can pass the lender's test and still be a poor hold. The methodology behind the code is published at how these figures are calculated.
Mistakes to watch for
- Annual taxes or insurance typed into the monthly fields, or the reverse.
- Using asking rent instead of the in-place lease, or a proposed lease instead of a signed one.
- Forgetting association dues, which belong in PITIA.
- Treating the illustrative maximum loan as an approval amount rather than one of several ceilings.
- Choosing interest-only for the ratio without pricing what happens when the interest-only period ends.
- Entering an optimistic value rather than one an appraisal is likely to support.
Each of those is recoverable if you catch it before an appraisal is ordered, and expensive afterwards.
Frequently asked questions
What DSCR do I need? It depends on the program and the lender. The rules this calculator models set minimums that differ by property type, and some programs lend below 1.00 at reduced leverage while others do not. There is no single industry minimum.
Is the calculator an approval? No. It is the same math the desk runs first. Lenders also weigh credit, reserves and property condition.
Why is my qualifying rent lower than my actual rent? Programs discount rent by rule. Which rule applies depends on property type and whether you are buying or refinancing.
Which calculator should I use? Use the Program Calculator when you know the loan amount and the property is a short-term rental, condotel or five-to-eight unit building. Use the loan calculator when you want to size a loan against a target ratio on a simple one-to-four unit rental.
Does the rate I enter affect the result? Yes, substantially, because it drives the payment in the denominator. Use a figure you can defend and test a range around it.
Next step
Run the property through the DSCR Program Calculator, then send us the purchase price or value, the rent, the loan amount you want, and your estimated taxes and insurance so we can review the structure. A deal review comes back from a specialist, and there is no credit pull at that stage.