On a single rental, DSCR is one property's rent over one payment. On a blanket loan, the math rolls up across every property, which changes how weak and strong houses affect approval.
In short: Portfolio DSCR is total monthly rent from every property in the pool divided by the total monthly debt payment, including principal, interest, taxes, insurance and dues. A pool with $11,000 of rent and $9,450 of total payments has a blended DSCR of about 1.16x. Many programs look for 1.0x or better across the portfolio, and some also set a floor for each property.
Portfolio DSCR = total qualifying rent ÷ total PITIA. PITIA is principal, interest, taxes, insurance and association dues. For a blanket loan, the principal and interest is allocated across properties, usually by each property's share of value.
Qualifying rent is often the lower of the signed lease and the appraiser's market rent. Some programs use market rent on vacant units; others give them zero until leased.
Here is the short version. If a pool brings in $20,000 a month and the total PITIA is $16,000, portfolio DSCR is 1.25x. If the PITIA rose to $20,000, the ratio would fall to exactly 1.0x.
Illustrative example only. Each row shows a property's qualifying rent and its share of the total payment.
| Property | Monthly rent | Allocated PITIA | Property DSCR |
|---|---|---|---|
| House 1 | $1,850 | $1,420 | 1.30x |
| House 2 | $1,600 | $1,310 | 1.22x |
| House 3 | $2,100 | $1,750 | 1.20x |
| House 4 | $1,400 | $1,700 | 0.82x |
| House 5 | $1,750 | $1,390 | 1.26x |
| House 6 | $2,300 | $1,880 | 1.22x |
| Portfolio | $11,000 | $9,450 | 1.16x |
House 4 sits at 0.82x on its own. As a standalone loan, it would need a specialty program or a smaller loan amount. Inside the pool, it is carried by five stronger houses, and the portfolio clears 1.0x at about 1.16x.
This is one of the biggest practical advantages of blanket financing. A high-tax or under-rented property does not have to be financed by itself.
Some programs check each property as well as the total. A common approach is to require the portfolio to clear 1.0x while allowing individual properties to dip lower, sometimes with a minimum floor.
Others exclude any property that falls below a set ratio. These rules vary by program.
If one house drags the ratio, options include raising its rent at renewal, appealing its tax assessment, or leaving it out of the pool.
The lender sets one loan payment for the whole blanket, then assigns each property a share for underwriting. The share is usually based on the property's portion of total value. A house worth 20% of the pool carries roughly 20% of the principal and interest.
Taxes, insurance and dues are not allocated. They are added at their actual amounts for each property. That is why a high-tax house can show a low individual ratio even when its value and rent look fine.
Residential portfolio loans compare gross rent to PITIA. Buildings with 5 or more units are usually underwritten on net operating income, which subtracts vacancy, management, repairs and other operating costs first. If your portfolio mixes both, expect each piece to be measured its own way.
Send your rent roll and current expenses and our financing team will calculate the portfolio ratio for you. We typically bring back 2–3 options, often within 48 hours.
Add up the qualifying rent on every property, then divide by the total monthly principal, interest, taxes, insurance and dues. The result is the blended or portfolio DSCR.
Not usually, if the rest of the pool is strong enough to keep the blended ratio above the program's minimum. Some programs do set a per-property floor, so a very weak house may need to come out.
Many programs look for about 1.0x or higher across the whole portfolio. Stronger ratios can improve leverage and pricing.
It depends on the program. Some use the appraiser's market rent for a vacant unit and others count zero until a lease is signed.
No. Residential portfolio DSCR uses gross rent against PITIA. NOI-based DSCR, used on 5+ unit multifamily, subtracts operating expenses before comparing to the debt payment.
Residential portfolio programs usually use gross qualifying rent, without subtracting management or repairs. Taxes, insurance and dues are counted in the payment side of the ratio instead.
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