How Is a 10+ Unit Apartment Refinance Underwritten?

Not small DSCR at larger scale

A 10+ unit apartment refinance is underwritten as an apartment deal, not as a residential DSCR loan on a bigger building. Net operating income drives the loan amount. The rent roll, trailing twelve-month operating statement, occupancy trend, and capital improvement history all feed that NOI line.

If you own a 12 unit, 14 unit, or 20 unit apartment building, this is the underwriting model you are actually shopping for on 10+ Unit DSCR. Many lenders never enter it because their DSCR products cap at 4 or 10 units.

NOI and DSCR

NOI is rental income minus operating expenses before debt service. Lenders normalize expenses, remove one-time items, and stress vacancy when appropriate. DSCR is NOI divided by the annual loan payment including principal, interest, taxes, insurance, and association fees where applicable.

✓Loan sizes: $500,000 to $15,000,000
✓Up to 75% LTV on refinance and purchase
✓Combined LTV up to 90% when subordinate debt fills the gap and the borrower retains at least 10% equity
✓Terms: 25 to 30 years with 5, 7, and 10 year hybrid options

Rent roll review

The rent roll is the live picture of the building. Lenders use it alongside the T-12 to confirm collections match what the statements show. See our apartment refinance document checklist for what to send first.

✓Unit mix, lease start and end dates, current rent versus market rent
✓Concessions and delinquency on each unit
✓Physical occupancy at close: typically 70% minimum on stabilized refinances
✓Economic occupancy and pro forma rents alone do not replace actual performance on permanent debt

T-12 operating statement

The trailing twelve-month statement shows whether NOI is stable or still moving. One good quarter after a renovation is useful context, but lenders weight a full year on larger buildings.

✓Expense lines for management, repairs, utilities, and insurance compared to market norms
✓Capital improvements since acquisition when requesting cash out soon after purchase
✓Rehab spend helps explain value growth and supports no-seasoning cash out on select 5+ unit deals

Sponsor strength

Experience operating apartments, liquidity, and track record carry more weight as loan size grows.

✓First-time apartment owners are sometimes considered, often at slightly lower leverage
✓Full recourse with personal guaranty is standard on this program
✓If another lender declined your 11+ unit building, ask whether they actually offer 10+ unit DSCR

Product limit vs. NOI judgment

A decline may be a product limit, not a judgment on your NOI. Many lenders simply do not quote above 10 units.

Common questions

How is a 10+ unit apartment refinance underwritten?+

Underwriting is NOI based. Lenders review trailing twelve-month operating statements, rent roll, physical occupancy, capital improvements, and sponsor strength, then calculate DSCR from net operating income against the proposed loan payment.

What occupancy is required?+

Minimum physical occupancy is typically 70% at close on stabilized 10+ unit DSCR refinances. Below that, bridge may be required first.

What changes the answer

·Value-add or lease-up assets below 70% occupancy may need bridge financing first.
·Student housing, affordable housing, and scattered-site portfolios add specialized diligence.
·Environmental, seismic, or deferred maintenance issues can change proceeds and timeline.
·Agency small balance may compete on some 11 to 25 unit garden deals with a heavier process.

Send rent roll and T-12 together on the first outreach. That pairing answers most of the initial underwriting question.

How is a 10+ unit apartment refinance underwritten?