Multifamily DSCR Calculator
Calculate apartment and multifamily DSCR, annual debt service, monthly payment, loan constant, and max loan amount at a target coverage ratio.
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How it works
Follow the underwriting path lenders use: input the deal, apply constraints, then read the result.
Enter multifamily NOI
Use stabilized annual NOI after vacancy, expenses, and reserves.
Multifamily DSCR Formula
Multifamily DSCR measures whether apartment NOI covers the annual mortgage payment. It is one of the most important agency and bank underwriting tests.
Last reviewed by Commercial Real Estate Finance Reviewers on .
DSCR = Multifamily NOI / Annual Debt Service
Max Annual Debt Service = NOI / Minimum DSCR$600,000 NOI and $480,000 annual debt service equals 1.25x DSCR.
See This Calculator in Action
Start with a lender-style example, then adjust the calculator inputs for your deal.
Apartment loan coverage screen
Multifamily 1.25x DSCR
- NOI: $900,000
- Loan amount: $10,500,000
- Rate / amortization: 6.50% / 30 years
- Minimum DSCR: 1.25x
The loan clears a common DSCR floor, but final proceeds still need to pass LTV and debt yield.
DSCR vs Debt Yield
| Metric | Formula | What It Tests |
|---|---|---|
| DSCR | NOI / Annual Debt Service | Whether property income covers the mortgage payment |
| Debt Yield | NOI / Loan Amount | Whether NOI is strong enough relative to loan balance |
| Key difference | Payment vs balance | DSCR changes with rate and amortization; debt yield does not |
DSCR vs LTV
| Metric | Driven By | When It Binds |
|---|---|---|
| DSCR | NOI, rate, amortization | Rates are high or income is thin |
| LTV | Property value and max leverage | Value is low or leverage cap is conservative |
| Best practice | Run both | The lower supported loan amount controls proceeds |
Common Lender Minimums
| Lender Type | Typical DSCR | Other Common Test |
|---|---|---|
| Bank | 1.25x-1.35x | 65%-75% LTV |
| Agency multifamily | 1.20x-1.30x | Program-specific LTV and reserves |
| CMBS | 1.25x+ | 10%+ debt yield |
| Bridge / debt fund | 1.10x-1.25x | Exit debt yield and reserves |
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Agency-style sizing | $750,000 NOI / 1.25x | $600,000 max annual debt service |
| Thin coverage | $420,000 NOI / $390,000 annual debt service | 1.08x DSCR |
| Strong coverage | $1,000,000 NOI / $700,000 annual debt service | 1.43x DSCR |
Conversion reference
| DSCR | Signal | Typical Response |
|---|---|---|
| 1.30x+ | Strong | More room for rate or NOI stress |
| 1.20x-1.30x | Common range | Often acceptable if other factors pass |
| 1.00x-1.20x | Thin | May require lower proceeds or reserves |
| Below 1.00x | Negative coverage | Property income does not cover debt service |
Quick facts
- Multifamily lenders often size debt around DSCR before checking other limits.
- Higher rates lower DSCR for the same loan amount.
- Agency programs may have specific DSCR and affordability requirements.
- Debt yield and LTV can still reduce proceeds even when DSCR passes.
Editorial Team
Commercial Real Estate Finance Reviewers
- Calculations reviewed against standard CRE lending formulas for DSCR, LTV, cap rate, and debt yield
- Methodology cross-checked against lender-style loan sizing using NOI, value, loan constant, DSCR, LTV, and debt yield
Our editorial team builds and reviews commercial real estate finance calculators around the way lenders actually size debt: property income, collateral value, annual debt service, and lender risk thresholds. Results are educational screening estimates, not loan quotes, tax advice, legal advice, or a commitment to lend.
Methodology: formulas are calculated from borrower-entered inputs using standard CRE underwriting relationships for NOI, debt yield, DSCR, LTV, cap rate, loan constant, and maximum loan proceeds.
Reviewer note: pages are reviewed for formula accuracy and updated when lender benchmarks or site methodology changes.
Disclaimer: results are educational estimates only and are not financial, legal, tax, valuation, or lending advice.
Frequently asked questions
Many multifamily loans screen around 1.20x to 1.30x or higher, but the required level depends on lender type, market, affordability rules, and loan structure.
No. DSCR should use net operating income after vacancy, operating expenses, and reserves, not gross rent.
Yes. If the appraised value or purchase price supports less debt than the income does, LTV can become the binding constraint.