The maximum (combined) loan-to-value can range from 60% to 80% of the After Repaired
Value (“ARV”) of the investment property, depending on the loan program. The ARV is
estimated by averaging recent comparable sales of arms-length transactions in the
neighborhood. We typically do not use foreclosures or short sales for comparison, only
Debt Service Coverage Ratio (DSCR) is a calculation that helps us determine if a rental
investment is generating enough income to make its loan payment obligations. To calculate
the debt service coverage ratio, simply divide the net operating income (Rental Income)
by the annual debt (Principal, Interest, Taxes, Insurance and Association Fees).