How Debt Yield can cut your loan, even within LTV and DSCR guidelines
[{"id": "f0l41ds", "text": "The increase in usage of debt yield is a huge trend with CRE lenders that savvy investors really need to pay attention to.", "replies": [{"id": "f15bvqt", "text": "It started becoming more popular in the cmbs 2.0 days because Dscr can be manipulated easily to make a loan meet your stips without necessarily reducing any risk. You can lower coupon, increase I/O periods to make a loan meet your Dscr stips, but to make a loan meet your DY stips, coupon and I/O periods don\u2019t really come into the picture. It\u2019s purely driven by loan proceeds.", "replies": [], "depth": 2}], "depth": 1}, {"id": "f1o60nt", "text": "Good article, but I consider the DY to be more of a relative to LTV vs. DSCR. It does help blow through the noise of DSCRs, however, which is helpful when your trying to price risk.", "replies": [], "depth": 1}]