CRE Loan Underwriting Screener

The Comptroller's Handbook, 'Commercial Real Estate Lending,' Version 2.0, March 2022, published by the Office of the Comptroller of the Currency, page 26, under the heading Supervisory Loan-to-Value Limits. It is a US government work in the public domain, free to download and free to quote. Search that title, turn to page 26, and check every figure on the SLTV LIMITS tab against it. That is the whole point of naming the source instead of asking you to trust a spreadsheet.

Because the handbook does not publish one. It tells each bank to set minimum standards for debt-service coverage and a minimum debt yield in its own lending policy (page 21). Printing an invented number and letting it look like regulation would be dishonest. The defaults here, 1.25x and 10%, are common market conventions and nothing more. Ask your lender for their numbers and type them into the blue cells.

Because the handbook ties the two together directly: 'The DSCR, calculated by dividing the NOI by the annual debt service requirements, measures the borrower's ability to service its debt. The determination of an appropriate DSCR should consider the loan amortization period and the expected volatility of the cash flow.' (page 43). Stretch the amortisation and the DSCR improves without the deal getting any better - which is why the sheet shows the same deal at 15, 20, 25 and 30 years side by side.

Because that is how it gets underwritten. Handbook page 40: 'Even if the terms of a loan permits interest-only payments, the property should nonetheless meet the bank's repayment capacity (debt service coverage) requirements as though the loan were amortizing.' So the sheet shows you both - what you actually pay each year, and the as-if-amortising figure the credit test uses.

No, but it stops being an ordinary approval and becomes an exception. The handbook allows loans above the supervisory limits where other credit factors support them, but says such loans should be identified in the bank's records and their aggregate amount reported at least quarterly to the board, and that all of them together must stay inside an aggregate basket (page 28). That is why an over-limit deal takes longer and needs a stronger story.

Yes. Every workbook is built with an older, universal formula vocabulary so it imports into free Google Sheets without add-ons, and it opens in Excel as well. You get both in one purchase.

The workbook was opened in a calculation engine, fully rebuilt, and 42 figures were compared to values worked out independently in code from the same seed inputs. One disagreement would have stopped the release. An excerpt of that ledger is on this page.