DSCR & Cash Flow

5–25 Unit Commercial Multifamily DSCR Underwriting

Net Operating Income (NOI) DSCR underwriting used for 5+ unit apartment buildings and mixed-use assets.

Underwriting Formula / Rule

Commercial DSCR = Annual Net Operating Income (NOI) ÷ Annual Debt Service (P&I).

Detailed Credit-Committee Impact & Thresholds

Unlike 1–4 unit residential DSCR (which divides gross rent by PITIA), 5+ unit commercial multifamily DSCR is underwritten on Net Operating Income (NOI): Gross Potential Rent minus a 5%–10% vacancy factor and operating expenses divided by annual debt service.

2026 Wholesale Benchmark: 1.20x–1.25x NOI DSCR up to 75% LTV across commercial wholesale shelves.

Related Underwriting Terms

Debt Service Coverage Ratio (DSCR)Form 1007 Single-Family Comparable Rent Schedule Form 1025 Small Residential Income Property Appraisal Report 5-4-3-2-1 Step-Down Prepayment Penalty 3-2-1 Step-Down Prepayment Penalty Yield Maintenance Prepayment Provision