DSCR and Debt Yield Calculator.

Debt yield is the ratio of annual NOI to the loan amount, expressed as a percentage. A debt yield of 10 percent means the property's NOI is 10 percent of the loan principal — equivalently, if the property were operating at break-even with no debt service, NOI would pay down 10 percent of principal annually. Debt yield is rate-and-amortization-independent, which is what makes it useful as a stress test against falling cap rates.

CMBS lenders added debt yield as a structural underwriting filter post-2008. Pre-crisis CMBS underwriting relied primarily on DSCR; aggressive interest-only structures and compressed cap rates allowed deals to clear DSCR thresholds with NOI levels that turned out to be unsustainable when cap rates expanded. Debt yield doesn't move when interest rate or amortization period changes — it isolates the property's cash flow contribution to loan principal. The post-2008 regulatory consensus elevated debt yield to a hard threshold alongside DSCR, particularly in CMBS conduit and life-co underwriting.

Typical debt yield thresholds in 2026: CMBS conduit 8–10%, CMBS SASB 7–9% (lower because trophy assets carry institutional cap rate compression that supports tighter debt yield), life-co 8–10%, debt fund 7–10% on transitional product. SBA, USDA, conventional bank, and HUD do not formally apply debt yield as a threshold — their DSCR-only structure reflects either guarantee-backed risk transfer (SBA, USDA, HUD) or relationship-driven flexibility (conventional bank).

For sponsors approaching CMBS conduit, CMBS SASB, or life-co financing, debt yield is often the binding constraint rather than DSCR. A deal with strong NOI and conservative loan amount may pass DSCR easily but fail debt yield because the loan amount is too high relative to NOI. The calculator above flags debt yield pass/fail separately from DSCR pass/fail to surface this distinction.

The threshold comparison panel shows where your deal lands against 11 capital sources, but interpreting the output requires context. A "PASS" doesn't mean the capital source will offer the most aggressive pricing — it means the deal clears the minimum threshold the capital source applies. A "FAIL" doesn't mean the capital source will reject the deal — it means your inputs (NOI, loan amount, rate, amortization) produce metrics below the published threshold for that source.

Multiple "PASS" outputs suggest competitive bidding opportunity. A deal that passes SBA, conventional bank, and CMBS conduit thresholds can credibly run all three quotes in parallel during term-sheet stage. A deal that passes only HUD and agency thresholds is structurally constrained — those are the eligible paths and pricing competition between them is the realistic strategy.

Failed thresholds typically have one of three explanations. The loan amount may be too high relative to NOI, producing acceptable DSCR but failing debt yield. The interest rate or amortization period may produce debt service that fails DSCR. Or the threshold itself may be wider than your inputs reflect — the calculator uses midpoint values for ranged thresholds, but specific lenders within a category may apply tighter or wider thresholds than the published midpoint.

The sensitivity slider (Section 7 below) helps surface how sensitive the pass/fail outputs are to NOI variance. A deal that passes at NOI 0% but fails everywhere at NOI -4% is fragile; a deal that passes at NOI -8% across most capital sources is structurally strong. The bankable framework's full feasibility scope addresses NOI sensitivity explicitly with stress testing across operating volatility scenarios specific to the asset class.

A failed threshold is not a deal-killer; it's a signal. Three responses typically resolve the issue.

Lower the loan amount. The most direct fix when DSCR or debt yield fails is reducing senior debt. A deal at 75% LTC may need to step down to 70% LTC to clear life-co debt yield; a deal at 80% LTV may need to step down to 70% LTV for CMBS conduit. The trade-off is sponsor equity — adding equity to lower the loan amount preserves access to the more conservative capital source at the cost of sponsor cash.

Add subordinated capital. Mezzanine debt, preferred equity, or sponsor-loan structures fill the gap between senior debt limits and total project cost. A deal that fails life-co at 65% LTV but works at 60% LTV with mezzanine layered to 80% combined LTV preserves leverage and accesses the more conservative pricing. The bankable framework's capital stack analysis surfaces the senior-mezz layered economics explicitly.

Pivot to a different capital source. A deal that fails CMBS conduit's debt yield but passes conventional bank's DSCR-only threshold can pursue conventional bank financing instead. A deal that fails life-co's tight DSCR but passes Fannie DUS at 1.25x may benefit from agency multifamily routing. The calculator's 11-source threshold comparison surfaces these alternatives explicitly.

The bankable framework's full feasibility scope addresses these scenarios as part of the capital path analysis. The Lender Fit Finder tool ranks capital sources by structural fit; the DSCR/Debt Yield calculator stress-tests against thresholds. Together, the two tools cover most pre-engagement scoping questions sponsors face.