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Understanding the DSCR or Debt Service Coverage Ratio in Commercial Mortgage Lending
The DSCR or debt service coverage ratio is the relationship of a property's annual net operating income (NOI) to its annual mortgage debt service (principal and interest payments). For example, if a property has $125,000 in NOI and $100,000 in annual mortgage debt service, the DSCR is 1.25.
How a RUBS System Can Lower a Property's Utility Expense
When underwriting a commercial real estate loan, one of the most important factors used to determine the approvability of a commercial mortgage request is the DSCR, commonly referred to as the debt service.
A Land Use Restrictive Agreement (LURA) subjects the multifamily real estate to a land use restriction agreement (LURA), in which the owner gives up some of their rights of the land use in exchange for the promise of future tax credits.
Learn How Calculate the Debt Service Coverage Ratio
The debt service coverage ratio is one of the least understood underwriting requirements for new and even seasoned commercial real estate investors. Briefly, the debt service coverage ration simply compares the subject property's net operating income to the proposed mortgage debt service (on an annual basis).
Know What a Commercial Lender is Looking for Before You Apply for a Commercial Mortgage
Are you applying for a commercial real estate loan with Crefcoa, or any other commercial lender? Would you like to have your loan flow smoothly and close in a timely manner? We help prepare you through a little preparation.
Commercial Lending Ratios Used by Commercial Lenders
When underwriting a commercial real estate loan, apartment loan, or conduit loan, there are 3 main ratios commercial lenders use to analyze the approvability of a commercial loan request. The three ratios are:
Non-Recourse Commercial Loans and Standard Carveouts
Non-recourse loans have exceptions within the loan documents that essentially transfer personal liability to the Sponsor for certain "bad boy" behaviors. Or more specifically, there are personal guarantees required with non-recourse loans.