Loan Sizing

Loan sizing is the process of determining the maximum loan a property can support, based on the most restrictive of several tests, typically LTV, LTC, DSCR, and debt yield. Lenders size to the lowest result among these tests, not the highest.

Example

A property tests at $7,000,000 on LTV, $7,175,000 on LTC, $6,500,000 on DSCR, and $6,500,000 on debt yield. The loan sizes to $6,500,000, the lowest of the four, not the average and not the highest.