Find the maximum senior loan a property supports — and see exactly which constraint binds: DSCR, debt yield, or LTV.
How lenders size a loan
A lender solves three separate maximum loans — one from each constraint — and lends the lowest. Whichever is smallest is the binding constraint that actually sets your proceeds.
Debt yield → NOI ÷ min debt yield
LTV → Value × max LTV
Interest-only sizing uses the rate itself as the loan constant. A stress rate raises the DSCR constant and reduces proceeds — how conservative lenders underwrite against rising rates.
What this means for your deal
Knowing the binding constraint tells you where to focus. If DSCR binds, the rate or amortization is the lever. If debt yield binds, only more NOI helps. If LTV binds, value is the question. Walking into the market with this answer is the difference between a tight process and a surprise.
See the gap senior debt leaves — Financing Gap →