Condominium

A condominium is a unit owned outright inside a building or complex whose common areas are owned jointly through an association. The association charges monthly dues, and those dues are the A in PITIA. DSCR lenders add them to the payment, which lowers the ratio compared with a house at the same rent.

Adding $300 a month in dues to the example property's $3,330 payment raises it to about $3,630. At $4,000 rent, the DSCR drops from 1.20 to 1.10. A condo usually needs more rent or a smaller loan than a comparable house to clear the same minimum.

Lenders also review the building itself: owner-occupancy share, delinquent dues, pending litigation and reserves. Some DSCR programs accept condos that fail conventional agency standards, but often at a lower loan-to-value or higher rate.

Further reading: Condominium on Wikipedia.