Rent roll, unit by unit
Add every unit’s rent to get the numerator. For 2-4 unit properties, the appraiser’s rent schedule covers each unit and is compared with existing leases. For five units and up, programs generally move toward a commercial-style review of the rent roll and operating statement, sometimes using net operating income rather than gross rent.
If one unit is vacant at application, ask how it will be treated: some reviews use market rent for the vacant unit, others use only leased income. That single decision can move your ratio meaningfully.
Expenses that matter more at scale
On larger buildings, owner-paid utilities, common-area maintenance and management are real costs. A residential-style DSCR on gross rent will not show them, but a commercial-style review will. Model a conservative net figure as well as the gross ratio so you are not surprised.
Value-add plans
If your plan is to renovate units and raise rents, underwriting is based on the rents in place or supportable today, not your pro forma. Use the break-even rent calculator to see how far current rents are from the target ratio, and how much of the plan has to succeed before a refinance works.
What gets reviewed
- Rent roll and leases for every unit
- Market rent schedule or operating statement
- Vacancy and how vacant units are counted
- Taxes, insurance and any owner-paid utilities
- Property condition, credit and reserves
We are a mortgage broker, not a lender. We arrange and shop this financing from wholesale lenders, and program availability, leverage and terms vary by lender and by scenario. Nothing on this page is a rate quote or a commitment to lend.