What is a good DSCR ratio for commercial loan approval?

Most commercial lenders require a minimum DSCR of 1.20, meaning the property's NOI is 20% greater than its annual debt service. Multifamily agency lenders (Fannie Mae, Freddie Mac) typically require 1.25. SBA loans often require 1.25 or higher. More conservative lenders or properties in volatile markets may require 1.30–1.40. Properties with a DSCR below 1.0 are considered cash-flow negative and will rarely qualify for conventional financing. DSCR loans for residential investment properties (1–4 units) are available from portfolio lenders with minimum DSCRs of 1.0–1.20. Some lenders offer negative DSCR or no-ratio products for strong borrowers with significant equity.