Refinance
SampleThe permanent loan that retires the construction loan, sized at the lowest lender test.Model v1, worked example, no edits
Sample loan terms and a sample schedule; edits save in this browser.
- Construction loan balance
- $33.92M
- As of month 48Matures Jul 2031, 6 months left
- Refinance loan
- $46.84M
- Model states $47.03MBinding: minimum debt service coverage
- Net cash out to equity
- $13.83M
- After payoff, fees, costs and reserves
- New DSCR
- 1.20x
- Meets 1.20xFirst loan year, on first stabilized year
Which test sizes the loan
The lowest of three lender tests on first stabilized year NOI of $3,787,177.
- Maximum loan to value (70.00% of value)$48.20M
- Minimum debt service coverage (1.20x coverage)Binding$46.84M
- Minimum debt yield (7.00% debt yield)$54.10M
Sizing arithmetic
- Appraised value
- $68,857,765
- Loan constant, first loan year
- 6.738%
- Debt service, first loan year
- $3,155,981
- Loan to value at the loan
- 68.0%
- Debt yield at the loan
- 8.09%
- Loan, the binding test
- $46,835,973
The model states a coverage loan of $47,032,098 and a loan of $47,032,000, which implies a 6.710% loan constant; the rate and amortization above give 6.738%. The gap is named here and closes when the pro forma is linked.
What the sizing assumes
Edit inputs: Refinance
Model v1, worked example, no edits
Hard inputs, versioned. An edit recomputes the sizing on this page only.
Timing and income
- Refinance monthSample input
- Month 61, Feb 2032
- NOI that sizes the loanSample input
- $3,787,177
- As the model states it (first stabilized year)
- Cap rate for valueSample input
- 5.50%
- Value $68,857,765
Lender tests
- Maximum loan to valueSample input
- 70.00%
- Minimum debt service coverageSample input
- 1.20x
- Minimum debt yieldSample input
- 7.00%
- Sample lender term
Loan terms
- RateSample input
- 5.40% fixed
- AmortizationSample input
- 30 years
- Loan constant 6.74%
- Interest-only monthsSample input
- 0
Fees and costs
- Exit or prepayment feeSample input
- 0.00% of payoff
- Open after month 18, no penalty
- Closing costsSample input
- $25,000
- Reserves held at fundingSample input
- $0
Where the loan goes
8% pref, GP catch-up, 80/20 to 15%, then 70/30: preferred return first, then return of capital.
Sources and uses
Sources equal uses to the cent.
| Sources | Amount |
|---|---|
| New permanent loan | $46,835,973 |
| Total sources | $46,835,973 |
| Uses | Amount |
| Payoff of the construction loan | $32,982,304 |
| Exit or prepayment fee | $0 |
| Closing costs | $25,000 |
| Reserves held by the lender | $0 |
| Cash out to equity | $13,828,668 |
| Total uses | $46,835,973 |
Cash out by waterfall tier
In the default structure's tier order.
| Tier | From the refinance |
|---|---|
| 1. Preferred returnUp to about $7.00M | $7,000,000 |
| 2. Return of capitalUp to about $18.27M | $6,828,668 |
| 3. Sponsor catch-upThe rest, split as the waterfall says | $0 |
| Cash out to equity | $13,828,668 |
Payoff and tier balances
The payoff is the model's stated $32,982,304. The draw schedule carries $33,922,221 drawn at the refinance; the $939,916 gap is a named seam until the pro forma is linked.
Tier balances are the model's statement for month 61: accrued preferred return of about $7.00M and $18.27M of contributed capital.
How rate and cap rate move it
Every other input held. The outlined cell is the case above.
Refinance loan
| Rate | Cap 5.00%-50 bp | Cap 5.50%Base | Cap 6.00%+50 bp |
|---|---|---|---|
| 4.40%-100 bp | $52.52M | $48.20M | $44.18M |
| 4.65%-75 bp | $51.00M | $48.20M | $44.18M |
| 4.90%-50 bp | $49.55M | $48.20M | $44.18M |
| 5.15%-25 bp | $48.17M | $48.17M | $44.18M |
| 5.40%Base | $46.84M | $46.84M | $44.18M |
| 5.65%+25 bp | $45.56M | $45.56M | $44.18M |
| 5.90%+50 bp | $44.34M | $44.34M | $44.18M |
| 6.15%+75 bp | $43.17M | $43.17M | $43.17M |
| 6.40%+100 bp | $42.05M | $42.05M | $42.05M |
Cash out to equity
| Rate | Cap 5.00%-50 bp | Cap 5.50%Base | Cap 6.00%+50 bp |
|---|---|---|---|
| 4.40%-100 bp | $19.51M | $15.19M | $11.18M |
| 4.65%-75 bp | $18.00M | $15.19M | $11.18M |
| 4.90%-50 bp | $16.55M | $15.19M | $11.18M |
| 5.15%-25 bp | $15.16M | $15.16M | $11.18M |
| 5.40%Base | $13.83M | $13.83M | $11.18M |
| 5.65%+25 bp | $12.55M | $12.55M | $11.18M |
| 5.90%+50 bp | $11.33M | $11.33M | $11.18M |
| 6.15%+75 bp | $10.16M | $10.16M | $10.16M |
| 6.40%+100 bp | $9.04M | $9.04M | $9.04M |
When it can close
Needs the second extensionSchedule forecast Feb 2032, month 61, against the construction loan's maturities.
- Initial term, months 0 to 42
- Extension 1, months 42 to 54
- Extension 2, months 54 to 66
- As of, month 48
- Refinance, month 61
| Event | Month | Date | Status |
|---|---|---|---|
| Construction loan closes$33.92M commitment, Sample Regional Bank | 0 | Jan 2027 | |
| Initial maturityInitial term | 42 | Jul 2030 | Extended |
| Extension 1 to month 540.25% fee, $84,806; test 1.15x, projected 1.60x | 42 | Jul 2030 | Exercised |
| Operating as-ofMaturity in force: month 54 | 48 | Jan 2031 | |
| Extension 2 to month 660.25% fee, $84,806; test 1.15x, projected 1.64x | 54 | Jul 2031 | Projected to pass |
| Refinance or sale, schedule forecastOn plan | 61 | Feb 2032 | Needs the second extension |
| Final maturity, fully extended2 extensions of 12 months | 66 | Jul 2032 |
Permanent loan terms
- Term
- 10 years from funding in month 61
- Amortization
- 30 years
- Prepayment
- Yield maintenance to year seven, open thereafter