Massachusetts DSCR Loan Calculator

Your debt service coverage ratio comes down to one core formula: monthly qualifying rental income ÷ total monthly payment (PITIA). A DSCR of 1.0 means the property's qualifying rent equals its full monthly principal, interest, property taxes, insurance, and condo or association dues; a ratio above 1.0 means the rent exceeds the payment, and a ratio below 1.0 means there is a monthly shortfall. Because DSCR loans are business-purpose credit for non-owner-occupied investment properties (exempt from consumer Regulation Z rules under 12 CFR 1026.3(a)), wholesale lenders qualify the deal on property cash flow rather than your personal tax returns, and each lender sets its own minimum ratio, credit score, down payment, and reserve rules.

Massachusetts per-$1,000 tax rates, Proposition 2½, and the residential exemption: Massachusetts cities and towns set property tax rates annually in dollars per $1,000 of assessed value (certified by the state Division of Local Services for FY2026, covering July 1, 2025 to June 30, 2026). For example, a $650,000 multi-family in Worcester at $13.28 per $1,000 equals $8,632 per year, or about $719 per month. While Proposition 2½ (M.G.L. c.59 §21C) caps a municipality's total levy at 2.5% of total taxable value and limits annual levy growth to 2.5% plus new growth and voter-approved overrides or exclusions, it caps the town's total levy—not your individual bill. Most importantly for investors, under M.G.L. c.59 §5C, the local-option residential exemption (up to 35% of average residential value in adopting communities such as Boston, Cambridge, Somerville, Chelsea, and Everett) applies only to an owner's principal residence. A rental unit you do not live in gets zero residential exemption and pays the full Class One residential rate (though 1–4 family rentals still pay the residential rate rather than the higher commercial rate in split-rate cities like Boston, where FY2026 residential is $12.40 vs. $26.96 commercial). Keep in mind that Community Preservation Act (CPA) surcharges under M.G.L. c.44B and separate district taxes are not included in the DLS rates; see our Massachusetts property tax rates by town guide for details.

Condo fees, homeowners insurance, and flood zones: if you are buying a condominium governed by M.G.L. c.183A, every dollar of monthly common charges (condo fees) counts directly in PITIA. For hazard insurance, the calculator estimates your annual premium using the NAIC 2023 Massachusetts HO-3 report (published July 2026), which works out to about $3.79 per $1,000 of coverage applied to 70% of the purchase price (the statewide HO-3 average was $2,134 and dwelling fire averaged $1,000). Because premiums have risen since 2023 and coastal quotes vary, we flag Cape & Islands towns and let you override the insurance field with a real quote. If your property is in a high-risk flood zone (where your lender may require flood coverage), toggling on flood insurance adds $1,618 per year—the median National Flood Insurance Program (NFIP) cost for Massachusetts 1–4 family homes in high-risk A and V zones for policies effective in 2025, computed from OpenFEMA data (the overall statewide NFIP median across all zones is $1,389).

Short-term rentals and Cape & Islands excises: if you are evaluating Massachusetts short-term rental DSCR loans, switching the calculator to short-term rental mode credits 80% of your projected gross monthly revenue to reflect typical underwriting haircuts (each lender sets its own method for booking history or projections). Under M.G.L. c.64G, stays of 31 consecutive calendar days or fewer are subject to a 5.7% state room occupancy excise, a local option excise of up to 6% (6.5% in Boston), an extra 2.75% excise in municipalities belonging to the Cape Cod and Islands Water Protection Fund (all Barnstable County towns participate, and Dukes and Nantucket towns may opt in), and local-option community impact fees of up to 3% on professionally managed units—meaning combined taxes can exceed 17% where all options are adopted. An exemption exists under the 14-day rule (c.64G §3) if a unit is rented for not more than 14 days in a calendar year, provided the operator registers with the Department of Revenue and files an annual declaration in advance. Operators must also carry at least $1,000,000 in liability insurance under M.G.L. c.175 §4F(b) and follow local bylaws—note that Boston restricts STR licenses to owner-occupied buildings, so non-owner investors in Boston typically underwrite on long-term leases.