Prepayment & Exit

Yield Maintenance Prepayment Provision

An institutional prepayment calculation that makes the lender whole for lost interest spread relative to U.S. Treasury yields.

Underwriting Formula / Rule

Penalty = Max(1% Floor, Present Value of Remaining Cash Flows Discounted at Treasury Rate − Payoff Balance).

Detailed Credit-Committee Impact & Thresholds

Common on 5–25+ unit commercial multifamily and portfolio DSCR loans, yield maintenance calculates the present value of remaining scheduled interest payments discounted at current Treasury rates.

2026 Wholesale Benchmark: Can be swapped for fixed step-down (5-4-3-2-1 or 3-2-1) on most wholesale Non-QM 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 No-Ratio / Sub-1.00x DSCR Loan