Market Value

Market value is the price a property would most likely sell for between a willing buyer and a willing seller, both informed and neither under pressure. An appraiser estimates it for a DSCR loan, and the lender caps the loan at a percentage of that figure through the loan-to-value limit.

On a purchase, lenders use the lower of the contract price and the appraised market value. If a $500,000 contract appraises at $480,000, a 75% LTV cap limits the loan to $360,000 instead of $375,000, and the buyer brings the difference.

Market value and DSCR set two separate ceilings. Value limits the loan through loan-to-value; rent limits it through the payment. The smaller of the two decides how much you can borrow.

Further reading: Market Value on Wikipedia.