On consumer loans, you use monthly income and payments to determine the debt to income ratios.

On commercial loans, you use the ANNUAL debt service to calculate the Debt Service Coverage Ratio (DSCR).

The owners of an office building want to borrow money against the cash flow of their property. That property shows $452,159 gross rental income, with a 6% vacancy factor and total operating expenses of $325,750 and a monthly debt service of $8,278. Calculate the effective gross income, net operating income, net operating income and debt service coverage ratio. Would the lender find the cash flow from this property satisfactory using a 1.25x DSCR? Why or why not?