ADR — Average nightly rate
The average nightly rate a short-term rental earns. ADR × occupancy, month by month, is how short-term income actually behaves — which is why the slow months, not the peak week, decide whether it covers the payment.
Glossary
DSCR loan glossary
Plain-English definitions of the terms used across this site's DSCR tools and guides.
43 terms. Figures in the definitions are read from the published program matrix and the site's DSCR engine, so they move when those do.
A
ARM — Adjustable-rate mortgage
A loan whose rate is fixed for a few years, then resets periodically. ARM options start lower than a fixed rate; check the reset cap structure carefully.
ARV — After-repair value
What the property is worth once the rehab or build is finished. It caps the refinance that retires a bridge or rehab loan: the Construction & Bridge tool sizes the takeout at no more than the ARV × the highest published rate-and-term refinance LTV, 80%.
B
BRRRR — Buy, rehab, rent, refinance, repeat
An investment plan whose refinance leg is where a DSCR loan comes in: the refinance loan the after-repair value (ARV) and rent support, the cash out, and the cash left in the deal.
Business-purpose loan
Credit extended primarily for a business purpose is exempt from Regulation Z, and comment 3(a)-4 treats credit to buy or improve rental property the owner will not occupy as business purpose. That exemption is what lets a lender qualify a DSCR loan on the property's rent instead of your income. The exemption has an occupancy limit, so if you plan to spend time living in the property, check it against that limit before relying on a DSCR loan.
src · 12 CFR 1026.3(a)(1) · Reg Z comment 3(a)-4
FAQ: why DSCR loans are called non-QMCan you live in a DSCR loan property?
C
Cash-out refinance
Replacing your loan with a larger one and taking the difference in cash. The property must re-qualify on DSCR at the new rate and the new, higher loan amount — if rates have risen since purchase, the higher payment may push DSCR below the qualifying floor. The highest cash-out LTV in any published Greenstreet program grid is 80%.
CLTV — Combined loan-to-value
The first mortgage's balance plus a second loan, divided by the property value. The scenario-review form shows it for a second lien once the first-mortgage balance is entered.
Condotel
A unit that looks like a condo on title but behaves like a hotel in operation: a front desk, nightly or short-stay rentals, a rental pool and hotel-style amenities. Its income is volatile and its resale market thin, so it is a narrower category than a standard condo, reviewed and priced differently when it is offered at all.
D
Deal-break rate
The interest rate at which DSCR falls to exactly 1.00x. The headroom between your offered rate and the deal-break rate, in basis points, tells you how much rate shock the deal can absorb before it fails — useful for ARM reset modeling and refinance planning. The Deal Analyzer shows both numbers.
Delayed financing
A cash-out refinance after an all-cash purchase. Some lenders allow it before the usual refinance seasoning has run, with the cash-out capped at your original acquisition costs.
DSCR — Debt service coverage ratio
DSCR (debt service coverage ratio) is the property's qualifying monthly rent divided by its full monthly payment, PITIA: principal, interest, taxes, insurance (and any flood policy), and any HOA dues. 1.00x means the rent exactly covers the payment; higher is stronger, and below 1.00x the rent does not cover it. For a long-term rental the qualifying rent is the lower of the signed lease and the appraiser's Form 1007 market rent, with no vacancy deduction. This is the lender-qualification figure the site's engine computes (Track 1); expense-aware views such as Track 2 and TCO DSCR are shown beside it, never blended into it.
DSCR cushion
The site sizes a deal, and calls it a comfortable pass, at 1.10x rather than at the bare 1.00x, where the rent covers the payment with nothing to spare. It is a sizing convention, not a program floor: programs set their own minimum DSCRs.
DSCR floor
The lowest DSCR a program accepts. The published Greenstreet programs' rated floors run from 0.75x to 1.00x, and Greenstreet Maple, Greenstreet Oak and Greenstreet Birch also publish a no-ratio option. Sub-1.00x options narrow the lender choices sharply.
DTI — Debt-to-income
The share of your paycheck already committed to debt payments. A conventional lender uses it to cap how many rentals you can own. A DSCR loan asks a different question: does this property's rent cover this property's mortgage payment?
E
EGI — Effective gross income
Gross scheduled rent, less vacancy and collection loss. It is the first line of a 5+ unit (commercial) underwrite, before operating expenses come out.
F
FIRPTA — Foreign Investment in Real Property Tax Act
Foreign owners of U.S. real property are subject to FIRPTA withholding when they sell. DSCR loan qualification does not depend on U.S. tax status, but FIRPTA may affect a later sale, so coordinate transaction-specific tax questions with a qualified cross-border tax professional.
src · FIRPTA IRC §897
Foreign national
A non-U.S. citizen with no ITIN or SSN. A lender may request alternative credit, identity, reserve and entity documentation. 4 of the 7 published Greenstreet programs identify a foreign-national path; documentation, leverage and reserves vary by program and transaction.
Form 1007 — Appraiser's comparable rent schedule
The appraiser's estimate of what the property would rent for as a standard unfurnished long-term rental. It is ordered as part of the appraisal, not a document you provide, and it is the market-rent figure the DSCR calculation rests on: the lender uses the lower of the lease rent and the 1007 rent.
H
Haircut
A percentage reduction a lender applies to an optimistic figure. It exists because projections don't account for occupancy variance, cancellations and seasonality — which is why a short-term-rental projection is cut harder than documented history.
I
Interest reserve
Money set aside to pay a construction or bridge loan's interest during the build. Construction and bridge debt carries no day-one rent, so the reserve is what the note costs before the property earns anything.
Interest-only (IO)
A payment that covers interest and no principal for a set period. It lowers the payment and lifts DSCR while it lasts; when the IO period ends the full balance amortizes over the years that are left, the payment rises and coverage falls. Check that post-recast DSCR before choosing interest-only.
ITIN — Individual Taxpayer Identification Number
A number the IRS issues to people who need a U.S. taxpayer ID but are not eligible for a Social Security number. It exists for tax administration: it is not work authorization and it is not a credit history, so whether a provider accepts ITIN files, and how it evaluates credit depth, is a question only the provider can answer.
L
LLC vesting
Holding the property in an LLC rather than in your own name. Most lenders prefer it for business-purpose compliance, and you will sign a personal guaranty (full recourse). Entity limits — how many owners, who must guarantee, how many LLC layers — are set program by program.
LTC — Loan-to-cost
The bridge or construction loan amount over the total project cost — land, hard costs and soft costs.
LTV — Loan-to-value
How the loan amount compares to the property value — lower means more equity. On a purchase it is 100% minus your down payment. The highest purchase LTV in any published Greenstreet program grid is 85%, but the applicable grid cell depends on credit, loan amount, DSCR, transaction type, property type and borrower profile.
N
No-ratio loan
A program tier with no minimum DSCR. A file whose DSCR is below every rated tier, or is not documented, falls to it rather than out of the program, and it prices at lower leverage than the same program's rated tiers. Greenstreet Maple, Greenstreet Oak and Greenstreet Birch publish a no-ratio option.
NOI — Net operating income
Effective gross income less operating expenses — taxes, insurance, management, maintenance and reserves. On a 5+ unit (commercial) file, DSCR is annual NOI divided by annual debt service, a different ratio from the 1–4 unit DSCR, which divides qualifying rent by the full PITIA.
Non-QM — Non-qualified mortgage
DSCR loans are often called non-QM, but that label is not what makes them possible — the business-purpose exemption is. A consumer non-QM loan still needs ability-to-repay income verification. The trade-off is that lenders bear more risk, which the rate reflects.
src · 12 CFR 1026.43(c)
P
PITIA — Principal, interest, taxes, insurance and association dues
The full monthly payment: principal, interest, taxes, insurance (and any flood policy), and any HOA dues. Use the actual tax bill for the post-sale assessed value, not the seller's homestead-exempt bill, and a real insurance quote. Taxes and insurance are the two PITIA components that most often surprise borrowers at underwriting.
Points — Discount points
Upfront fees paid to buy the rate down — roughly 1% of the loan per 0.25% of rate reduction. Find the break-even before paying them.
Prepayment penalty
A fee some loans charge if you pay the loan off or refinance early, typically on a declining schedule. Accepting one lowers the rate: waiving it adds 0.50–0.80% on top of any tier in the site's illustrative rate table. Some states restrict or ban prepayment penalties on investment-property loans, so check the State Rules page before assuming the penalty option is available.
State Rules ReferenceDSCR prepayment penalties: price your exit early
Q
Qualifying rent
The rent figure DSCR is measured on. For a long-term rental it is the lower of the lease and the Form 1007 market rent. For a short-term rental it is the lowest of three figures: the 1007 long-term rent, a projection at 80%, and documented platform history at 90% — history is discounted less because it is evidence rather than a forecast. If the property has never operated as a short-term rental, you qualify on the 1007 long-term rent regardless of what Airbnb projects.
R
Rate-and-term refinance
Replacing your current loan to change the rate or term, without taking cash out. The property re-qualifies on DSCR at the new rate. The highest rate-and-term LTV in any published Greenstreet program grid is 80%.
Refinance break-even
Total closing costs divided by the monthly payment reduction, in months. If you sell or refinance again before then, the refinance cost you money — and a prepayment penalty on the existing loan belongs in those closing costs.
Reserves
Months of mortgage payments kept in the bank after closing. Each published program sets its own reserve minimum, most often stepped by loan size, and the minimum of the program you qualify for governs your file.
S
Seasoning
Elapsed time since a defining event: the purchase, the last refinance, or in some frameworks a listing coming off market. For a refinance it is the minimum time the property must be held first, and it can decide whether a recently bought property is valued at what you paid or at its current appraised value.
Short-term rental (STR)
An Airbnb- or VRBO-style rental. Its income is qualified more conservatively than a lease (see qualifying rent), and all 7 published Greenstreet programs are marked STR-eligible. STR legality is a city and county question, and Greenstreet holds no municipal STR dataset — confirm the local rule before you rely on the income.
Step-down prepayment penalty
A prepayment penalty whose percentage shrinks every year you hold the loan. The common schedules are 5/4/3/2/1% over 5 years and 3/2/1% over 3 years.
T
Takeout loan
The permanent loan that retires a construction or bridge note. It is the smallest of the amount requested, the ARV × the published refinance LTV, and the loan a 1.00x exit DSCR supports. A takeout is a refinance, so it also needs the same ownership seasoning as any DSCR refinance.
TCO DSCR — True cost of ownership DSCR
Standard DSCR divided by (1 + reserve load), which loads CapEx, maintenance and vacancy reserves into the denominator. Lenders score the standard number; the TCO figure shows whether the property funds its own reserves. The default reserve load, 38.89%, comes from the engine's single-family operating-cost rate.
Track 1 — Lender qualification
The DSCR a lender scores: qualifying rent divided by PITIA. The engine runs every deal on Track 1 and Track 2 and shows the two side by side, never blended.
Track 2 — Investor survival
The expense-aware DSCR: gross rent less vacancy, management, maintenance and CapEx, divided by the same PITIA. A deal can pass Track 1 and still carry negative monthly cash flow on Track 2, which is why the two are shown side by side.
Y
Yield maintenance
A prepayment penalty sized to make the lender whole for the interest lost on early payoff; usually the costliest prepay option.