- Call our commercial loan staff 206-303-8526
- Streamlined process to get your loan done
- Creative funding solutions
- Email nick@commercial-loans-source.com
- Fast closing of deals
- Fill out the contact form or call now!




Apartment Loans
Apartment Loans
Apartment lending varies by property location, borrower strength, LTV ratio, and numerous other factors. In order to determine the maximum loan amount that can be borrowed an underwriter will calculated the property’s Net Operating Income (NOI). This process begins with Gross Rental Income, which includes all rental income, laundry income, and any other recurring income. Once Gross Rental Income is caluculated all property operating expenses must be subtracted to reach the Net Operating Income. Typical operating expenses include: property tax, insurance, utilities, repairs & maintenance, landscaping, property management, administrative, & other miscellaneous expenses. The bank’s underwriters will also take out additional expenses which typically include: 5% vacancy, 5% management, and $100-$300 per unit in replacement reserves based on the condition of the building.
Apartment Loan - Simple NOI Calculation
NOI = (Gross Rental Income – 5% Vacancy) – 5% management – replacement reserves – all other historic operating expenses
With the NOI we can now calculated a DSCR and the final loan.
Debt Service Coverage Ratio (DSCR)
The maximum apartment loan is amount is constrained by the Debt Coverage Ratio which is calculated:
DSCR = NOI / Annual Debt Service
Annual Debt Service = Monthly Principle & Interest X 12
For Apartment Loans the DSCR ration requirement is 1 to 1.20 in some cases the DSCR can be lowered to 1 to 1.15 or lower based on the location of the property & other mitigating factors.
Example Apartment Loan
20 Unit Apartment with a $144,000 NOI.
Loan: $1,570,000 @ 6.5% Rate 30 Year AM
Annual Debt Service = $120,202
$144,000 (NOI) / $120,202 (Annual Debt Service) = 1.20 (DSCR)
Items Required to Initiate and Apartment Loan
- Current Rent Roll
- 2 Full Years Income & Expense Statements + Year to Date Income & Expense Statement
- Color Photos
- Borrower’s Personal Financial Statement
- Borrower’s Credit Score
If you need to speak to an experienced commercial loan officer we recommend speaking with Nick Fitzer of BMC Capital. He can be reached at 206 303 8526 or at nfitzer@bmccapital.com

- Call our commercial loan staff 206-303-8526
- Streamlined process to get your loan done
- Creative funding solutions
- Email nick@commercial-loans-source.com
- Fast closing of deals
- Fill out the contact form or call now!




nick@commercial-loans-source.com

- “My loan closed super fast and I got the financing I needed!"
- "The apartment building loan was expensive, but with your team helping me get refinanced I saved over $3,000 per month."
- "I have had five different commercial loans companies bid on my loan, but you had the lowest rates."
- "Thank you. We will definitely use your company again across all of our commercial properties."
- "Stellar job getting this loan taken care of getting the paperwork done quickly!"





