does not have consistent treatment or requirement from one lender to another
an example of dscrlet s say a real estate developer seeks a mortgage loan from a local bank the lender will want to calculate the dscr to determine the ability of the developer to borrow and pay off their loan as its rental properties generate income the developer indicates that net operating income will be 2 150 000 per year and the lender notes that debt service will be 350 000 per year the dscr is calculated as 6 14 the borrower can cover their debt service more than six times given their operating income dscr 2 150 000 350 000 6 14 begin aligned text dscr frac 2 150 000 350 000 6 14 end aligned dscr 350 000 2 150 000 6 14 mk lending corp has outlined its debt requirements for new mortgages the columns highlighted in yellow represent investors with a dscr greater than or equal to 1 00 the orange columns represent investors with a dscr of less than 1 00 the yellow investors are less risky so their loan terms and ltv cltv terms are more favorable than those of the orange investors mk lending corp sun country inc entered into an agreement with the u s department of the treasury and the bank of new york mellon sun country agreed to several financial covenants as part of the loan and guarantee agreement 3certain trigger events will occur should sun country s dscr fall below a specified level certain stopgaps will be enacted to protect the lenders when triggers occur the lenders will receive 50 of select revenues for a specific amount of time should sun country s dscr drop below 1 00 