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DSCR Guidance Job Aid - Table of Contents
Lender Underwritten DSCR per Guide Requirements: Guidance and
Examples
Page 2 -4 Definitions and detailed explanation of calculation methodologies
Page 4 – 7 Scenarios and calculation examples
Actual DSCR and DSCR at Maximum Payment
**
Fields Retired/Disabled for Mortgage Loan deliveries on or after October 2022**
Page 8 Definitions and detailed explanation of calculation methodologies
Page 8 – 13 Scenarios and calculation examples
Target State DSCR Fields
Page 14 UW NCF DSCR, UW NCF DSCR IO, UW NCF DSCR at Cap and UW NCF DSCR
All In (new fields) - Definitions
Page 15 – 17 Scenarios and calculation examples for Fixed Rate Mortgage Loans
Page 18 – 21 Scenarios and calculation examples for ARM Loans
Page 23 – 28 Scenarios and calculation examples for SARM Loans
Page 29 Review of Credit Facilities - UW NCF DSCR at Facility Level and UW NCF
DSCR IO at Facility Level (new fields) - Definitions
Page 30 Deal 1: Scenario and calculation example for UW NCF DSCR at Facility Level
Page 31 Deal 1: Scenario and calculation example for UW NCF DSCR IO at Facility Level
Page 32 Deal 2: Scenario and calculation example for UW NCF DSCR at Facility Level
Page 33 UW NCF DSCR, UW NCF DSCR IO, UW NCF DSCR at Cap and UW NCF DSCR
All In, UW NCF DSCR at Facility Level and UW NCF DSCR IO at Facility Level -
Summary and Conclusions
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Job Aid: Lender Underwritten DSCR per Guide Requirements:
Guidance and Examples
Information Effective: October 24, 2022
This purpose of this document is strictly for guidance and examples only. This document is not
a replacement for the Multifamily Selling and Servicing Guide (the “Guide”). This guidance and
examples are effective as of October 6, 2017 and are subject to change. Refer to the most recent
Guide and Underwriting Standards (Form 4660) for complete details on the Lender
Underwritten DSCR per Guide Requirements field.
Lender Underwritten DSCR per Guide Requirements
The ratio of underwritten Net Cash Flow (“NCF”) and the underwritten annualized debt service (see below for
more guidance on how to calculate this debt service).
Underwritten Net Cash Flow (Underwritten NCF) = Underwritten Effective Gross Income less
underwritten Property operating expenses including Capital Expenditures (Replacement Reserves) as required
in the Multifamily Selling and Servicing Guide (the “Guide”).
However, for Cooperative Properties, Lender must calculate: (i) Cooperative Market Rental Basis
(“Underwritten NCF”), and (ii) Actual Cooperative Property Basis (“Actual Cooperative Property NCF”), as
follows:
Cooperative Market Rental Basis Net Cash Flow (“Underwritten NCF”): Underwritten NCF calculated
as described above, however, based on a Market Rental Basis as reflected in the Appraisal. The
Cooperative Market Rental Basis NCF must include minimum economic vacancy and Capital
Expenditures (Replacement Reserves) per unit, if any, as set forth in the Underwritten NCF calculation
detailed in Part IIIA, Chapter 3 or Part IIIB, as required in the Guide; and
Actual Cooperative Property Basis Net Cash Flow (“Actual Cooperative Property NCF”): calculated on
actual Cooperative Property operations as required in the Guide.
Underwritten Annualized Debt Service = the following calculations for full and partial interest only
Mortgage Loans:
For Fixed Rate Mortgage Loans:
The annual debt service must be based on a level debt service payment with an Amortization term
pursuant to the Multifamily Underwriting Standards, or other Amortization term approved by Fannie
Mae, and the higher of:
the Gross Note Rate; or
the required Underwriting Interest Rate Floor (as identified in the “Underwriting Standards (Form
4660)”.
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For Adjustable Rate Mortgage Loans (ARM Loans)
1
:
Structured ARM Loans (“SARM Loans”): Based on the underwritten annualized monthly payment
calculation using the overall Variable Underwriting Rate (as defined in Part IIIC Chapter 6 Section
605) of the “Guide”).
ARM 5-5 and ARM 7-6 Loans (i.e. “Embedded Cap ARM Loans”): Based on the annualized monthly
payment calculated using the Maximum Lifetime Interest Rate (as defined in Part IIIC Chapter 5 of
the “Guide”).
For Cooperative Property Mortgage Loans: the underwritten annual debt service must be
calculated as stated above, with the following caveat: Cooperative Market Rental Basis: Debt
service must be based on a level debt service payment with an Amortization term pursuant to
the Multifamily Underwriting Standards, or other Amortization term approved by Fannie Mae,
and the higher of:
the Gross Note Rate; or
the required Underwriting Interest Rate Floor; and
If Fannie Mae pre-approves subordinate debt as provided in the Guide, the annual debt
service must also include principal and interest to cover the maximum principal amount of
the subordinate debt outstanding.
Actual Cooperative Property Basis: Debt service must be based on a level debt service payment
at the actual Gross Note Rate with an Amortization term pursuant to the Multifamily
Underwriting Standards, or other Amortization term approved by Fannie Mae. If Fannie Mae
pre-approves subordinate debt as provided in the Guide, the annual debt service must also
include principal and interest to cover the actual loan balance of such subordinate debt
outstanding at the time of underwriting. Interest-only payments may only be used for a full
term interest-only Mortgage Loan.
For Supplemental Mortgage Loans:
Based on the combined annual debt service amount of all Pre-Existing Mortgage Loans and the
Supplemental Mortgage Loan based on the following:
Pre-Existing Mortgage Loans
Interest Rate Type Amortization Type Debt Service Amount
Fixed Rate Fully-amortizing
Partial-term Interest-Only
Amortizing debt service amount based
on the Gross Note Rate
Full Term Interest-Only Interest-Only debt service amount
based on the Gross Note Rate
Adjustable Rate
1
Fully-amortizing
Partial-term Interest-Only
Amortizing debt service amount based
on the origination loan amount,
amortization term, and variable
underwriting rate
1
In addition to meeting the Lender Underwritten DSCR per Guide requirements described above, in no event shall the Mortgage Loan amount exceed
the amount calculated in Part IIIA of the Guide for a fixed rate Mortgage Loan with equivalent term and Tier and using the Lender delegated pricing
published in the DUS Pricing Memo or, if applicable, the Fannie Mae approved fixed rate pricing for the Mortgage Loan in effect at the time of Rate Lock
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Pre-Existing Mortgage Loans
Full Term Interest-Only Interest-Only debt service amount
based on the origination loan amount,
amortization term, and variable
underwriting rate
Supplemental Mortgage Loan**
Interest Rate Type Amortization Type Underwritten Annualized Debt
Service Amount
Fixed Rate / Adjustable
Rate
2
All Amortization Types Amortizing debt service amount based
on the greater of the Gross Note Rate
or:
for fixed rate Supplemental
Mortgage Loans, the applicable
Underwriting Interest Rate Floor
in the applicable Multifamily
Underwriting Standards; or
for adjustable rate Supplemental
Mortgage Loans, the variable
underwriting rate determined in
accordance with Part IIIC
**Please note, Supplemental Mortgage Loans must comply with New Loan Test in the Guide, which may further restrict
proceeds. Please refer to Part IIIC – Chapter 2 for complete details on Supplemental Mortgage Loans and sizing requirements.
Sample Calculations
Example 1: $10,000,000 Fixed Rate Mortgage Loan (Fully Amortizing)
Conventional Mortgage Loan
Gross Note Rate: 4.00
Underwriting Interest Rate Floor = 5.00
Loan Term: 120 months
Interest Only Term: 0 months
Amortization: 360 months
Underwritten NCF: $1,000,000
Underwritten Debt Service (Amortizing @ 5.00% UW Interest Rate Floor): $53,682 (monthly), $644,186 (annualized)
Lender Underwritten DSCR per Guide Requirements:
1.55 = $1,000,000 / $644,186 (@ UW Interest Rate Floor)
Cooperative Property Mortgage Loan
Gross Note Rate: 4.00
Underwriting Interest Rate Floor = 5.00
Loan Term: 120 months
Interest Only Term: 0 months
Amortization: 360 months
2
In addition to meeting the Lender Underwritten DSCR per Guide requirements described above, in no event shall the Mortgage Loan amount exceed
the amount calculated in Part IIIA of the Guide for a fixed rate Mortgage Loan with equivalent term and Tier and using the Lender delegated pricing
published in the DUS Pricing Memo or, if applicable, the Fannie Mae approved fixed rate pricing for the Mortgage Loan in effect at the time of Rate Lock
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Underwritten NCF (Market Rental Basis): $1,000,000
Actual Cooperative Property NCF: $573,000
Underwritten Debt Service (Amortizing @ 5.00% UW Interest Rate Floor): $53,682 (monthly), $644,186 (annualized)
Debt Service (Amortizing @ 4.00%): $47,742 (monthly), $572,898 (annualized)
Lender Underwritten DSCR per Guide Requirements (Market Rental Basis):
1.55 = $1,000,000 (Market Rental Basis NCF) / $644,186 (@ UW Interest Rate Floor)
Actual Cooperative Property DSCR:
1.0 = $573,000 (Actual Cooperative Property NCF) / $572,898
Example 2: $10,000,000 Fixed Rate Mortgage Loan (Partial Interest Only)
Conventional Mortgage Loan
Gross Note Rate: 4.00
Underwriting Interest Rate Floor = 5.00
Loan Term: 120 months
Interest Only Term: 60 months
Amortization: 360 months
Underwritten NCF: $1,000,000
Underwritten Debt Service (Amortizing @ 5.00% *UW Interest Rate Floor): $53,682 (monthly), $644,186 (annualized)
Lender Underwritten DSCR per Guide Requirements:
1.55 = $1,000,000 / $644,186 (@UW Interest Rate Floor)
Cooperative Property Mortgage Loan
Gross Note Rate: 4.00
Underwriting Interest Rate Floor = 5.00
Loan Term: 120 months
Interest Only Term: 60 months
Amortization: 360 months
Underwritten NCF (Market Rental Basis): $1,000,000
Actual Cooperative Property NCF: $573,000
Underwritten Debt Service (Amortizing @ 5.00% UW Interest Rate Floor): $53,682 (monthly), $644,186 (annualized)
Debt Service (Amortizing @ 4.00%): $47,742 (monthly), $572,898 (annualized)
Lender Underwritten DSCR per Guide Requirements (Market Rental Basis):
1.55 = $1,000,000 (Market Rental Basis NCF) / $644,186 (@UW Interest Rate Floor)
Actual Cooperative Property DSCR:
1.00 = $573,000 (Actual Cooperative Property NCF) / $572,898
Example 3: $10,000,000 Fixed Rate Mortgage Loan (Full Interest Only)
Conventional Mortgage Loan
Gross Note Rate: 4.00
Underwriting Interest Rate Floor = 5.00
Loan Term: 120 months
Interest Only Term: 120 months
Amortization: 360 months
Underwritten NCF: $1,000,000
Underwritten Debt Service (Amortizing @ 5.00% UW Interest Rate Floor): $53,682 (monthly), $644,186 (annualized)
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Lender Underwritten DSCR per Guide Requirements:
1.55 = $1,000,000 / $644,186 (@UW Interest Rate Floor)
Cooperative Property Mortgage Loan
Gross Note Rate: 4.00
Underwriting Interest Rate Floor = 5.00
Loan Term: 120 months
Interest Only Term: 120 months
Amortization: 360 months
Underwritten NCF (Market Rental Basis): $1,000,000
Actual Cooperative Property NCF: $573,000
Underwritten Debt Service (Amortizing @ 5.00% UW Interest Rate Floor): $53,682 (monthly), $644,186 (annualized)
Debt Service (Interest Only @ 4.00%): $33,333 (monthly), $400,000 (annualized)
Lender Underwritten DSCR per Guide Requirements (Market Rental Basis):
1.55 = $1,000,000 (Market Rental Basis NCF) / $644,186 (@UW Interest Rate Floor)
Actual Cooperative Property DSCR:
1.43 = $573,000 (Actual Cooperative Property NCF) / $400,000
Example 4: $10,000,000 ARM Loans
3
:
Please note, ARM Loan examples do not reflect Fixed Rate Test which further may impact proceeds and DSCR calculation,
refer to Guide and Underwriting Standards (Form 4660) for further details.
ARM 7-6 Loan: ARM Loan with embedded interest rate caps
Initial Interest Rate: 2.00 (Guaranty Fee + Servicing Fee + 30 Day Average SOFR index)
Lifetime Max Interest Rate: 8.00 (Initial Interest Rate + 6% embedded interest rate cap)
Loan Term: 84 months
Interest Only Term: 36 months
Amortization: 360
Underwriting NCF: $1,000,000
Debt Service using Lifetime Max Interest Rate: $73,376 (monthly), $880,517 (annualized)
Lender Underwritten DSCR per Guide Requirements:
1.14 = $1,000,000 / $880,517
STRUCTURED ARM Loan
Initial Interest Rate: 2.77 (ex. Margin (Guaranty Fee, Servicing Fee plus Investor spread) + 30 Day Average SOFR index)
Variable Underwriting Rate (as defined in the Guide): 5.77 (Initial Interest Rate + Underwriting Spread (i.e., 3%) + Cap
Cost Factor)
Term: 120 months
Interest Only: 36 months
Amortization: 360 months
Underwriting NCF: $1,000,000
Underwritten Debt Service using Variable Underwriting Rate: $58,484 (monthly), $701,813 (annualized)
Lender Underwritten DSCR per Guide Requirements:
1.42 = $1,000,000 / $701,813
3
In addition to meeting the Lender Underwritten DSCR per Guide requirements described above, in no event shall the Mortgage Loan amount exceed
the amount calculated in Part IIIA of the Guide for a fixed rate Mortgage Loan with equivalent term and Tier and using the Lender delegated pricing
published in the DUS Pricing Memo or, if applicable, the Fannie Mae approved fixed rate pricing for the Mortgage Loan in effect at the time of Rate Lock
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Example 5: Hybrid ARM Loan:
A 5-Year Hybrid ARM Loan for $3,817,000.00 secured by a Property located in a Strong Market or Los Angeles-Long
Beach-Anaheim, CA MSA:
Initial Fixed Interest Rate: 4.11
Underwriting Interest Rate Floor = Not Applicable for Hybrid ARM Loans
Interest Only Term: 0 months
Loan Term: 360 months
Amortization: 360 months
Underwritten NCF: $277,000
Underwritten Debt Service (Amortizing @ 4.11%): $18,466 (monthly), $221,590 (annualized)
Lender Underwritten DSCR per Guide Requirements:
1.25 = $277,000 / $221,590 (@ Actual Interest Rate)
A 7-Year Hybrid ARM Loan for $1,720,000.00 secured by a Property located in a Nationwide Market:
Initial Fixed Interest Rate: 4.18
Minimum 1.00 DSCR Stress Test: 6.68 (Initial Fixed Interest Rate of 4.18 plus 2.50)
Underwriting Interest Rate Floor = Not Applicable for Hybrid ARM Loans
Underwritten Value: $2,150,000.00
Interest Only Term: 0 months
Loan Term: 360 months
Amortization: 360 months
Underwritten NCF: $142,140
Maximum Loan Amount per LTV at 80%: $1,720,000.00
Maximum Loan Amount minimum 1.00 DSCR Stress Test @ 6.68: $1,839,425
Underwritten Debt Service (Amortizing @ 4.18%) at maximum constrained loan proceeds $1,720,000.00: $8,391
(monthly), $100,692 (annualized)
Lender Underwritten DSCR per Guide Requirements:
1.41 = $142,140 / $100,692 (@ Actual Interest Rate)
Example 6: Supplemental Mortgage Loan:
Please note, Supplemental Mortgage Loans must comply with New Loan Test in the Guide, which may further restrict
proceeds. Please refer to Part IIIC – Chapter 2 for complete details on Supplemental Mortgage Loans and sizing
requirements.
Underwriting NCF = $1,400,000
Loan Amount and Loan Term Rate / Amortization / Interest Only Annualized Debt Service
Pre-Existing
Mortgage Loan
$10,000,000 Origination UPB; 5
years remaining
Gross Note Rate = 5.50%; Amortization
= 360 months; Interest Only = 0 months
$681,347
Supplemental
Mortgage Loan
$5,000,000; 5 years Gross Note Rate = 5.00%; UW Interest
Rate Floor = 6.75%; Interest Only = 0
months
$389,159 (@UW Interest
Rate Floor)
Total Combined Annualized Debt Service $1,070,506
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Lender Underwritten DSCR per Guide Requirements:
1.31 = $1,400,000 / $1,070,506
1
In addition to meeting the Lender Underwritten DSCR per Guide requirements described above, in no event shall the Mortgage Loan amount
exceed the amount calculated in Part IIIA of the Guide for a fixed rate Mortgage Loan with equivalent term and Tier and using the Lender delegated
pricing published in the DUS Pricing Memo or, if applicable, the Fannie Mae approved fixed rate pricing for the Mortgage Loan in effect at the time
of Rate Loc
k
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Job Aid: DSCR Training Aid for Currently Disclosed DSCR Fields
**Fields Retired/Disabled for Mortgage Loan deliveries on or after October
2022**
Actual DSCR
Actual DSCR is the ratio of underwritten Net Cash flow (“NCF”) and the annualized debt service.
UW NCF = Underwritten Effective Gross Income less underwritten Total Expenses.
Annualized Debt Service = For full and partial interest only Mortgage Loans use Initial Interest Rate
multiplied by Actual UPB at Acquisition. For amortizing 30/360 and Actual/360 Mortgage Loans use monthly
payment as stated in the Loan Documents multiplied by 12.
Product Variations:
Partial and Full Interest Only Mortgage Loans: this calculation will not include an amortization
factor.
ARM Loans/Hybrid ARM Loans: this calculation will be based on the initial interest rate.
Cooperative Properties: Actual cooperative NCF effective gross income less underwritten Total
Expenses.
Supplemental Mortgage Loans and Mortgage Loans with Subordinate Debt or Additional
Debt (Combined): The ratio of Underwritten Net Cash Flow (UW NCF) to the annualized combined
monthly payments of all Pre-Existing Mortgage Loans.
Combined monthly payments = the combined monthly payments for all supplemental, subordinate
debt, and first liens (does not include soft debt). If the additional debt is partial IO and is still in its IO
period, then the IO payment should be used. If the additional debt is partial IO and is in its
amortization period, then the amortizing payment should be used.
DSCR at Maximum Payment:
DSCR at Maximum Payment is the ratio of underwritten Net Cash Flow (“NCF”) and the debt service
calculated as described below.
UW NCF = Underwritten Effective Gross Income less underwritten Total Expenses.
Partial Interest Only Mortgage Loans
DSCR = Underwritten NCF/ annualized partial interest only amortizing payment.
ARM Loans/Hybrid ARM Loans
DSCR = Underwritten NCF/ annualized monthly payment calculated using, the Lifetime Maximum Interest
Rate, if applicable, for ARM Loans with an embedded cap or, the Variable Underwriting Rate for other ARM
Loans (e.g., SARM Loans) with an amortization factor (except in the case of a full interest only Mortgage Loan
– no amortization factor is used).
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Product Variations:
Interest Only Mortgage Loans: For Fixed and ARM Loans, Partial Interest Only Mortgage Loans,
DSCR at Maximum Payment will be different than Actual DSCR. For Fixed Rate, Full Interest Only
Mortgage Loans DSCR at Maximum Payment will be the same as Actual DSCR but will be different for
ARM Loans.
Amortizing Mortgage Loans: For Fixed Rate, Amortizing Mortgage Loans, DSCR at Maximum
Payment will be the same as Actual DSCR unless the Mortgage Loan is a Cooperative Property.
Cooperative Properties:
This calculation will use the UW NCF = Rental equivalent NCF Effective Gross Income less
underwritten Total Expenses.
The DSCR at Maximum Payment field will not contain the same figure as Actual DSCR field due
to different NCFs being used in the calculations.
Supplemental Mortgage Loans and Mortgage Loans with Subordinate Debt or Additional
Debt (Combined): The ratio of Underwritten Net Cash (UW NCF) to the annualized combined
monthly payments of all Pre-Existing Mortgage Loans.
Combined monthly payments = the combined monthly payments for all supplemental, subordinate
debt, and first liens (does not include soft debt). If the additional debt is partial IO and is in or out of its
IO period the amortizing payment should be used.
____________________________________________________________________________
Sample Calculations
Example 1 Amortizing Mortgage Loan
Loan $10,000,000
Interest Rate: 5.00
Fixed Rate
Term: 120
Amortization: 360
Underwritten NCF: $1,000,000
Debt Service: $53,682, annualized $644,186
Actual DSCR:
1.55 = $1,000,000 / $644,186
DSCR at Maximum Payment:
1.55
Cooperative Property
:
Loan $10,000,000
Interest Rate: 5.00
Fixed Rate
Term: 120
Amortization: 360
Actual Cooperative NCF: $750,000
Rental Equivalent NCF: $1,000,000
Debt Service: $53,682, annualized $644,186
Actual DSCR:
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1.16 = $750,000 (Actual Cooperative NCF) / $644,186
DSCR at Maximum Payment:
1.55 = $1,000,000 (Rental Equivalent NCF) / $644,186
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Interest Only Mortgage Loan
Loan $10,000,000
Interest Rate: 5.00
Fixed Rate
Term: 120
Amortization: 0
Underwritten NCF: $1,000,000
Debt Service: .0500 * $10,000,000 = $500,000
Actual DSCR:
2.00 = $1,000,000 / $500,000
DSCR at Maximum Payment:
2.00
Partial Interest Only Mortgage Loans:
Loan: $10,000,000
Interest Rate: 5.00
Fixed Rate
Term: 120
Actual 360
Partial IO: 12 months
Original Amortization: 0
Amortization: 360
Underwritten NCF: $1,000,000
Debt Service: .0500 * $10,000,000 = $500,000
Amortizing Debt Service: $53,682, annualized $644,186
Actual DSCR:
2.00 = $1,000,000 / $500,000
DSCR at Maximum Payment:
1.55 = $1,000,000 / $644,186
Example 2 - ARM Loans:
Amortizing
ARM 7-6 Loan: ARM Loan with embedded interest rate caps
Loan $10,000,000
Initial Interest Rate: 5.00 (Margin + 30 Day Average SOFR index)
Amortization: 360
Lifetime Max Interest Rate/Ceiling: 8.00
Underwriting NCF: $1,000,000
Debt Service using initial interest rate: $53,682, annualized $644,186
Debt Service using lifetime max interest rate: $73,377, annualized $880,518
Actual DSCR:
1.55 = $1,000,000 / $644,186
DSCR at Maximum Payment:
1.14 = $1,000,000 / $880,518
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Hybrid ARM Loans:
Amortizing
Hybrid ARM Loan
Loan $3,817,000.00
Initial Fixed Interest Rate: 4.11
Underwriting Interest Rate Floor = Not Applicable for Hybrid ARM Loans
Lifetime Max Interest Rate (Initial Fixed Interest Rate + 5%): 9.11
Interest Only Term: 0 months
Loan Term: 360 months
Amortization: 360 months
Underwritten NCF: $277,000
Debt Service using initial interest rate: $18,466, annualized $221,590
Debt Service using lifetime max interest rate: $31,015 , annualized $372,180
Actual DSCR:
1.25 = $277,000 / $221,590
DSCR at maximum Payment:
0.74 = $277,000 / $372,180 (@ Maximum Lifetime Interest Rate)
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Example 3 – Structured ARM Loans:
Loan: $12,500,000
Initial Interest Rate: 2.770 (ex. Margin (G Fee, S Fee and Investor spread) + 30 Day Average SOFR index)
Variable Underwriting Rate (As defined in the Guide): 5.77 (Initial Interest Rate + Underwriting Spread + Cap Cost)
Applicable Fixed Rate for same term mortgage: 4.95
Term: 120 months
Amortization: 360 months, using a straight line over loan term based on Applicable Fixed Rate
Fixed Principal Payment: $18,655
Lifetime Max Interest Rate/Ceiling: None
Underwriting NCF: $1,000,000
Debt Service using initial interest rate: Interest ($12,500,000*.02770/12=$28,854) plus Fixed Principal ($18,655) equals
$47,510, annualized $570,118
Debt Service using variable underwriting rate: Interest (12,500,000*.0577/12=$60,104) plus Fixed Principal ($18,655)
equals $78,760, annualized $945,118
Actual DSCR:
1.75 = $1,000,000 / $570,118
DSCR at Maximum Payment:
1.06 * = $1,000,000 / $945,118
It is possible for the DSCR at Maximum Payment to be less than 1.0 due to differences in interest rates used to calculate the
principal payment and the interest due.
___________________________________________________________________________
PARTIAL IO
Loan: $12,500,000
Initial Interest Rate: 2.770 (ex. Margin (G Fee, S Fee and Investor spread) + 30 Day Average SOFR index)
Variable Underwriting Rate (As defined in the Guide): 5.77 (Initial Interest Rate + Underwriting Spread + Cap Cost)
Applicable Fixed Rate for same term mortgage: 4.95
Term: 120 months
Amortization: 360 months, using a straight line over loan term based on Applicable Fixed Rate
Fixed Principal Payment: $18,655
Lifetime Max Interest Rate/Ceiling: None
Underwriting NCF: $1,000,000
Debt Service using initial interest rate: Interest $12,500,000*.0277=$346,250
Debt Service using variable underwriting rate: Interest ($12,500,000*.0577/12=$60,104) plus Fixed Principal ($18,655)
equals $78,760, annualized $945,118
Actual DSCR:
2.89=$1,000,000 / $346,250
DSCR at Maximum Payment:
1.06 * = $1,000,000 / $945,118
It is possible for the DSCR at Maximum Payment to be less than 1.0 due to differences in interest rates used to calculate the
principal payment and the interest due.
____________________________________________________________________________
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FULL IO
Loan: $12,500,000
Initial Interest Rate: 2.770 (ex. Margin (G Fee, S Fee and Investor spread) + 30 Day Average SOFR index)
Variable Underwriting Rate (As defined in the Guide): 5.77 (Initial Interest Rate + Underwriting Spread + Cap Cost)
Applicable Fixed Rate for same term mortgage: 4.95
Term: 120 months
Amortization: 360 months, using a straight line over loan term based on applicable Fixed Rate
Fixed Principal Payment: None
Lifetime Max Interest Rate/Ceiling: None
Underwriting NCF: $1,000,000
Debt Service using initial interest rate: Interest $12,500,000*.0277=$346,250
Debt Service using variable underwriting rate: Interest $12,500,000*.0577=$721,250
Actual DSCR:
2.89 = $1,000,000 / $346,250
DSCR at Maximum Payment:
1.39 = $1,000,000 / $721,250
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Job Aid: DSCR Training for Target State DSCR Fields
Review of DUS and Bulk Deliveries Fields
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Fixed Rate Mortgage Loan Scenarios
Scenario Review: Fixed Rate Amortizing Mortgage Loans
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Scenario Review: Fixed Rate Interest Only Mortgage Loans
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Scenario Review: Fixed Rate Partial Interest Only Mortgage Loans
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ARM Loan Scenarios
Scenario Review: Amortizing ARM Loans
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Scenario Review: Full Interest Only ARM Loans
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Scenario Review: Full Interest Only ARM Loans cont.
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Scenario Review: Partial Interest Only ARM Loans
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Scenario Review: Partial Interest Only ARM Loans cont.
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Confidential‐InternalDistribution
SARM Loan Scenarios
Scenario Review: Amortizing SARM Loans
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Confidential‐InternalDistribution
Scenario Review: Amortizing SARM Loans cont.
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Confidential‐InternalDistribution
Scenario Review: Full Interest Only SARM Loans
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Confidential‐InternalDistribution
Scenario Review: Full Interest Only SARM Loans cont.
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Confidential‐InternalDistribution
Scenario Review: Partial Interest Only SARM Loans
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Confidential‐InternalDistribution
Scenario Review: Partial Interest Only SARM Loans cont.
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Confidential‐InternalDistribution
Credit Facilities
Review of Credit Facilities DSCR Fields
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Confidential‐InternalDistribution
UW NCF DSCR at Facility Level – Example Deal 1
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Confidential‐InternalDistribution
UW NCF DSCR IO at Facility Level – Example Deal 1
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Confidential‐InternalDistribution
UW NCF DSCR at Facility Level – Example Deal 2
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Confidential‐InternalDistribution
Debt Service Coverage Ratio Summary and Conclusion
