Debt Yield vs DSCR vs LTV — Multifamily Comparison

How debt yield, DSCR, and LTV work together

Multifamily lenders size commercial apartment loans using three core metrics. Proceeds bind to the most restrictive result—not the metric the sponsor prefers.

Quick formula reference

When each metric tends to bind

Debt yield often binds on stabilized agency deals when lenders want rate-independent leverage checks. DSCR binds when interest rates rise faster than NOI growth. LTV binds when purchase prices or value opinions run ahead of income support.

Worked comparison example

Assume normalized NOI of $1,000,000, value $13,500,000, min debt yield 9.5%, min DSCR 1.25x, max LTV 75%, and annual debt service of $780,000 on a $10.2M loan (1.28x DSCR).

• Debt yield max: $1M ÷ 0.095 ≈ $10.53M
• LTV max: $13.5M × 75% = $10.13M
• DSCR supports roughly $10.2M in this illustration

That decision sits inside our Multifamily Underwriting Calculators hub, where Multi-Family USA maps lender fit and structure tradeoffs.

That decision sits inside our Multifamily Financing Guides hub, where Multi-Family USA maps lender fit and structure tradeoffs.

That decision sits inside our Multifamily Financing Guides hub, where Multi-Family USA maps lender fit and structure tradeoffs.

That decision sits inside our Investor Playbooks hub, where Multi-Family USA maps lender fit and structure tradeoffs.

That decision sits inside our Compare Multifamily Capital Options hub, where Multi-Family USA maps lender fit and structure tradeoffs.

That decision sits inside our Multifamily Underwriting Calculators hub, where Multi-Family USA maps lender fit and structure tradeoffs.

Operators comparing options often continue with Multifamily DSCR Requirements by Lender Type before booking a strategy call.

LTV binds near $10.1M—not debt yield or DSCR alone.

Sponsor takeaway

Present all three metrics in lender packages with downside stress. Read the debt yield and LTV framework and run the loan sizing calculator.

Frequently asked questions