Multifamily DSCR Calculator
DSCR = NOI / Annual Debt Service. Multifamily agency lenders (Fannie, Freddie, HUD) typically require 1.25x minimum. Sizing your loan to DSCR 1.25 is often more restrictive than LTV — it determines max loan.
| NOI | — |
| LTV-constrained loan | — |
| DSCR-constrained loan | — |
| Final loan amount (lower of two) | — |
| Annual debt service at final loan | — |
| Actual DSCR at final loan | — |
| Down payment / equity required | — |
Multifamily DSCR (Debt Service Coverage Ratio) = NOI / Annual Debt Service. Agency lenders (Fannie Mae DUS, Freddie Mac Optigo, HUD 223(f)) typically require 1.25x minimum. In today's rate environment above 6%, DSCR is usually the binding loan-sizing constraint — meaning you'll get less loan than the LTV cap allows because the NOI cannot support a bigger payment.
How Lenders Size Multifamily Loans
Lenders run two parallel tests: (1) LTV test: loan cannot exceed X% of value (typical 75%). (2) DSCR test: monthly payment cannot exceed NOI / 1.25 / 12. The lender funds the LOWER of the two. When rates are high, the DSCR constraint kicks in first — you might qualify for 75% LTV by appraisal but only get 65% loan because NOI cannot support the bigger payment.
Interest-Only Period Increases Sized Loan
Lenders allow 2-5 year IO front-end (up to 10 years on Class A+) on agency multifamily. IO drops debt service to interest only — no principal — increasing the sized loan because DSCR is calculated on interest-only payment. Tradeoff: when IO period ends, payment jumps significantly (sometimes 20-30%) as amortization kicks in. Underwrite the post-IO payment to ensure NOI growth covers the shock.
Last updated May 2026. Sources: Fannie Mae DUS Guide.