Finance
In New York, the 'debt service coverage ratio' (DSCR) used by commercial lenders measures:
AThe borrower's personal credit score
BThe ratio of a property's NOI to its annual debt service (mortgage payments)✓ Correct
CThe loan-to-value ratio
DThe percentage of income spent on taxes
Explanation
DSCR = NOI ÷ Annual Debt Service. Lenders use DSCR to determine whether a property generates sufficient income to cover its mortgage payments. A DSCR of 1.25 means the property earns 25% more than needed to service the debt.
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