← Valtrics Real Estate · Decisions · Engine 03 · Funding Gap
Agency lenders size on trailing in-place NOI at acquisition. Enter the note terms and the lender's three covenants. The value basis for LTV is the lesser of purchase price and appraised/stabilised value (NOI ÷ submarket cap rate).
| Project name | |
| NOI used for sizing | annual $ |
| Purchase price | $ |
| Submarket cap rate (for stabilised value) | % |
| Proposed loan | $ |
| Interest rate (all-in) | % |
| Amortization | years |
| Max LTV covenant | % |
| Minimum DSCR covenant | x |
| Minimum debt-yield covenant | % |
A lender lends the lowest of these three. The tightest test is the binding constraint; loosening the other two will not raise proceeds.
| Test | Max Loan | Status | How it works |
|---|---|---|---|
| 1. LTV Test | — | Value basis × max LTV | |
| 2. DSCR Test | — | NOI ÷ min DSCR, capitalised at the note | |
| 3. Debt Yield Test | — | NOI ÷ minimum debt yield | |
| Maximum supportable loan | — | ||
| Proposed loan | — |
| Maximum supportable loan | — |
| Surplus / (Shortfall) | — |
| Implied maximum LTV on purchase price | — |
| Additional equity needed if lender sizes down | — |
Debt Sizing & Refinancing is a pre-commitment financing test. Once the deal closes, track the drawn capital stack and budget in the separate Budget & Capital Stack Engine →
If the amortizing payment pushes DSCR below covenant early on, a lender may quote an interest-only period. This tests whether interest-only alone closes the coverage gap.
| Monthly payment if amortizing from close (on supportable loan) | — |
| Amortizing DSCR at the supportable loan | — |
| I/O verdict | — |
Standard institutional sizing conventions. Figures are decision support, not a lending commitment. Confirm covenants with your lender.