Figures throughout come from lender and broker program guidelines. They vary by lender and move with the market, so treat them as the shape of the product rather than a quote.
How is the DSCR ratio calculated?
Gross monthly rent divided by PITIA: principal, interest, taxes, insurance, and HOA dues.
A property renting at $2,500 with a $2,000 total monthly payment has a ratio of 1.25, which most lenders read as a clean file. Rent of $1,800 against a $2,000 payment gives you 0.90, which means a larger down payment and a higher rate if a lender will do it at all.
Notice what's absent. There's no debt-to-income calculation, no W-2, no tax returns, no employment verification. That's the entire appeal for a self-employed investor, someone whose returns show heavy depreciation, or anyone buying their fourth property when conventional lenders have stopped counting.
Why does New Hampshire make the ratio harder?
Because the T in PITIA is unusually large here.
New Hampshire funds local services primarily through property tax, with no state income or sales tax carrying part of the load, and rates rank among the highest in the country. Bedford's 2025 total rate was $16.49 per $1,000 of assessed value. Hooksett's median effective rate runs near 1.7% of market value.
That expense lands directly in the denominator of your DSCR calculation. Two identical buildings with identical rents, one in New Hampshire and one in a low-property-tax state, produce different ratios and therefore different loan terms. The New Hampshire property qualifies for less.
Three things follow from that:
Pull the actual parcel tax bill before you model anything. A town average will mislead you, and the difference between a $14 and an $18 rate on a $600,000 building is thousands of dollars a year moving through your ratio.
Watch revaluation years. If a town is completing a town-wide revaluation, the assessment underpinning your tax estimate may be about to change. Bedford is completing one in 2026.
Expect to put more down here than the national guidance suggests. The 20% figure quoted in most DSCR content assumes a tax burden lighter than New Hampshire's.
Want to know what ratio a specific building actually produces? Send me the address and I'll pull the parcel's real assessment and tax rate alongside comparable rents. Two business days, no obligation.
Can I use a DSCR loan for a short-term rental?
Many programs allow it, and the underwriting is the part to understand before you count on it.
Lenders commonly qualify short-term rentals using market rent or an averaged operating history rather than peak seasonal income. For a New Hampshire resort-market property, that distinction is significant.
Rabbu's Conway data shows short-term rental revenue averaging $7,758 in August and $1,454 in April. A lender is not going to underwrite the August figure. It will use something closer to the average, and the average for that market runs roughly $37,100 to $42,842 a year depending on the data source.
Which produces a genuine trap. A property that services its debt comfortably on an annualized figure can still leave you short in April and May, because the loan payment doesn't flex with the season. The lender's ratio tells you whether the year works. It doesn't tell you whether the spring does.
If you're buying in the White Mountains or Lakes Region, model the months separately from whatever ratio the lender lands on.
What are the trade-offs?
DSCR loans exchange documentation for structure, and a few pieces of that structure catch people out:
Prepayment penalties are common. If you plan to refinance or sell inside a few years, ask about the penalty structure before you sign rather than after.
Investment properties only. These can't be used for a primary residence or a second home. If you're house hacking a two-to-four unit building and living in one unit, this is the wrong product.
Not usually assumable, and notes frequently include due-on-sale and transfer clauses. Moving a property into an LLC after closing may require lender consent.
Rehab isn't included. DSCR is permanent financing on a rent-ready property. The common pattern is a bridge or fix-and-flip loan for the work, then a refinance into DSCR once the property is stabilized and leased.
Rates run above conventional. Investment-property conventional loans were in the low-to-mid 7% range in 2026 against roughly 6% to 8.25% for DSCR, with the spread reflecting the documentation you're skipping.
How do I improve my ratio?
Four levers, in rough order of practicality:
- Increase the down payment. Moving from 80% to 75% LTV lowers the payment, which lifts the ratio and often improves your rate tier at the same time.
- Consider an interest-only structure, where a program offers one. It lowers the monthly payment and lifts the ratio, at the cost of no amortization during that period.
- Document market rents properly. If a unit is vacant or renting below market, a rent schedule or market analysis can support a higher figure than the current lease shows.
- Target properties with better rent-to-value. This is the structural fix, and in New Hampshire it usually means looking where taxes are lower or rents are stronger relative to price.
