CMBS Conduit Loan Sizing Calculator

Size commercial real estate mortgage-backed securities (CMBS) loans. Model underwriting constraints by Debt Yield (9%-10%), LTV caps, DSCR coverage, and 10-year balloon maturities.

CMBS Underwriting & Debt Sizing Inputs

Model commercial mortgage conduit loans by debt yield, DSCR constraints, and balloon maturities

Net Operating Income (NOI, $)

Appraised Value ($)

10-Year Fixed Interest Rate (%)

Minimum Debt Yield Requirement (%)Conduit standard: 9.0% - 10.0%

Maximum LTV Cap (%)

Amortization Schedule (Years)

Final Sized CMBS Loan

$9,800,000

LTV Constrained

Actual Debt Yield

9.69%

Min 9.5% required

DSCR Coverage

1.26x

$62,913/mo P&I

Balloon Maturity (Yr 10)

$8,339,082

Refinance balance due

Commercial Debt Term Sheet Sizing Ready

Share with commercial mortgage brokers, conduit lenders, and investment committees

Underwriting Commercial Real Estate with CMBS Conduit Loans

Commercial Mortgage-Backed Securities (CMBS) conduit loans provide non-recourse, fixed-rate financing for stabilized commercial real estate assets, including retail centers, industrial parks, hotels, and office buildings. Conduit lenders package these loans into diversified debt pools sold on Wall Street. Because secondary bond market investors require strict underwriting standards, loan amounts are primarily sized by minimum Debt Yield (typically 9.0% to 10.0%) and DSCR constraints rather than simple appraisal LTV.

Key Investment & Valuation Features

✓

Dual Debt Yield & LTV Constraint Engine

Sizes loan capacity simultaneously against minimum debt yield thresholds and statutory maximum LTV caps to identify the binding constraint.

✓

10-Year Fixed Term & 30-Year Amortization

Models standard institutional CMBS conduit repayment structures with 30-year amortization and 10-year balloon maturities.

✓

Debt Service Coverage Ratio (DSCR) Sizing

Computes exact monthly and annual debt service to ensure compliance with 1.25x-1.35x institutional rating agency requirements.

✓

Year 10 Balloon Payoff Projection

Calculates the precise unamortized principal balance due at loan maturity that must be refinanced or paid off.

✓

Non-Recourse Underwriting Guidelines

Highlights standard conduit covenants including non-recourse carve-out bad-boy guarantees and springing cash management.

✓

Lender Term Sheet Summary

Generates structured sizing reports ready for commercial mortgage bankers, correspondents, and conduit originators.

Practical Real Estate Scenarios

✓
Commercial Property Owners
Determine maximum cash-out refinance proceeds available on stabilized shopping centers and industrial assets.
✓
Commercial Mortgage Brokers (CMBs)
Evaluate client financing requests against rating agency debt yield criteria before submitting to conduit desks.
✓
Real Estate Investment Trusts (REITs)
Lock in long-term fixed-rate debt across regional retail strip and self-storage portfolios.
✓
Private Equity Real Estate Firms
Model balloon maturity debt roll risks and evaluate non-recourse debt options.

Frequently Asked Questions

What is a CMBS conduit loan?

A CMBS (Commercial Mortgage-Backed Security) conduit loan is a commercial real estate loan secured by income-generating property that is pooled with other loans and securitized into bonds sold to institutional bond investors.

Why is Debt Yield more important than LTV in CMBS lending?

Debt Yield is calculated as: Net Operating Income (NOI) / Loan Amount * 100. Unlike LTV, which relies on subjective property appraisals and market cap rates, Debt Yield measures the lender's raw cash-on-cash return if they were forced to foreclose today, making it immune to market valuation bubbles.

What are typical CMBS prepayment penalties?

CMBS loans typically feature either Defeasance (substituting the commercial mortgage with a portfolio of US Treasury securities that replicates the remaining cash flows) or Yield Maintenance (paying the present value of the remaining interest payments discounted at Treasury yields).

Are CMBS conduit loans non-recourse?

Yes. CMBS loans are non-recourse, meaning the borrower has no personal liability beyond the collateral property, except in cases of 'bad boy carve-outs' (intentional fraud, bankruptcy filing, voluntary misapplication of rents, or environmental liabilities).