Finance

A Pennsylvania commercial real estate loan with a 1.25 DSCR means:

AThe property generates 25% more income than needed to cover debt service✓ Correct
BThe loan-to-value ratio is 1.25%
CThe interest rate is 25 basis points above prime
DThe loan has 25 months of debt service reserves

Explanation

DSCR (Debt Service Coverage Ratio) = NOI ÷ Annual Debt Service. A 1.

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