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.
Read the calculation methodology and limitations.
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
Explore institutional underwriting examples. Load any scenario into the live calculator with one click to customize rates, amortization, and property valuation.
Multifamily 1.25x DSCR
DSCR = Multifamily NOI / Annual Debt ServiceThe loan clears a common DSCR floor, but final proceeds still need to pass LTV and debt yield.
Underwriting Metric Comparison & Lender Sizing Standards
Compare debt yield against DSCR and LTV constraints, and review typical sizing assumptions across lender types.
DSCR vs Debt Yield
3 Core Sizing TestsNOI / Annual Debt ServiceWhether property income covers the mortgage payment
NOI / Loan AmountWhether NOI is strong enough relative to loan balance
Payment vs balanceDSCR changes with rate and amortization; debt yield does not
| 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
3 Core Sizing TestsNOI, rate, amortizationRates are high or income is thin
Property value and max leverageValue is low or leverage cap is conservative
Run bothThe lower supported loan amount controls proceeds
| 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 |
Typical Commercial Lender Underwriting Minimums (Benchmark Screening)
5 Lender Categories1.20x – 1.30x65% – 75%
1.25x – 1.30x75% – 80%
1.25x – 1.35x65% – 75%
1.30x – 1.45x60% – 65%
1.10x – 1.20x70% – 80%
| Lender Category | Typical Minimum DSCR | Typical Maximum LTV | Typical Minimum Debt Yield |
|---|---|---|---|
| Conventional Commercial Bank | 1.20x – 1.30x | 65% – 75% | 8.50% – 10.00% |
| Agency Multifamily (Fannie Mae / Freddie Mac) | 1.25x – 1.30x | 75% – 80% | 7.50% – 8.50% |
| CMBS Conduit (Wall Street Securitization) | 1.25x – 1.35x | 65% – 75% | 9.50% – 11.00% |
| Life Insurance Companies | 1.30x – 1.45x | 60% – 65% | 8.00% – 9.50% |
| Debt Funds / Bridge Lenders | 1.10x – 1.20x | 70% – 80% | 7.00% – 8.50% (Exit DY) |
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 | Meaning |
|---|---|---|
| 1.30x+ | Strong | More room for rate or NOI stress |
| 1.20x-1.30x | Income exceeds payments | Compare with the actual requirement |
| 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
Compare with the requirement for the specific lender, program and payment structure. Calculator assumptions do not establish eligibility.
No. Use the accepted net income definition, including a separate reserve deduction if required by the lender; do not use gross rent.
Yes. If the appraised value or purchase price supports less debt than the income does, LTV can become the binding constraint.