PITIA
What is PITIA?
Principal + Interest + Taxes + Insurance + Association dues — the total monthly housing expense used as the denominator of DSCR.
PITIA stands for Principal, Interest, Taxes, Insurance, and Association dues. It is the full monthly housing expense an investor pays on a rental property — the cost side of the DSCR equation.
- Principal — the portion of the payment that reduces the loan balance.
- Interest — the cost of borrowing at the loan’s rate.
- Taxes — property taxes assessed by the local jurisdiction, divided by 12.
- Insurance — the monthly hazard (and where applicable, flood) insurance premium.
- Association dues — HOA, condo association, or master-association fees that run with the unit.
On interest-only loans, the calculation during the IO period typically uses ITIA (drop the Principal component) since no amortization is occurring. After the IO period ends and the loan amortizes, PITIA becomes the operative figure.
How PITIA applies at Total Quality Lending
Total Quality Lending uses PITIA as the denominator in every DSCR calculation on DSCR loans, Multi-Unit DSCR, and Foreign National DSCR programs. The taxes, insurance, and HOA components come from the appraisal’s property data; principal and interest come from the underwritten loan terms.