How much is DSCR actually swinging your refi terms right now?

[Oyewole Tolulope Emmanuel]

Lenders seem to be tightening DSCR requirements lately. Anyone seeing real differences in refinance terms between a 1.0x and a 1.25x+ deal in this rate environment?

[Mark Updegraff]

I look at DSCR before I care what the lender’s minimum is.

If a property is sitting around 1.0x, the bigger problem for me isn’t whether somebody will make the loan. It’s that there’s almost no margin for an insurance increase, tax change, vacancy or unexpected repair.

On multifamily I generally want to see something around 1.20x or better in my own underwriting even if a lender is willing to stretch further.

I’d also model the refinance at several loan amounts instead of just asking “what’s my max proceeds?” Sometimes leaving some equity in the deal and preserving breathing room produces a much healthier investment than squeezing every possible dollar out at refi.