What Is Debt Yield?
Debt yield is NOI divided by loan amount, expressed as a percentage. It tells a lender what unleveraged return they would earn if they had to take the property back at par. Because the formula has no interest rate or amortization term in it, debt yield does not flex with the rate environment — which is precisely why lenders trust it as a downside-leverage stress test.
Why Lenders Care More About Debt Yield Than LTV
Loan-to-value depends on an appraisal, which depends on cap rates, which compress when interest rates fall. A property at a 5% cap rate gets a higher appraisal than the same property at a 6.5% cap rate — even with identical NOI. Debt yield strips out that appraisal noise. A 9% debt yield means the property earns 9¢ of NOI for every $1 of loan, full stop.
Lender Minimum Debt Yield Requirements
- Agency Multifamily (Fannie/Freddie): 7.0–8.0%
- CMBS Conduit (office/retail/industrial): 8.0–9.0%
- CMBS Hospitality: 11.0–12.0%
- HUD 223(f): 6.5% (lowest in industry)
- Bridge / Debt Fund: 6.0–7.0% with stabilization plan
Pair this with the DSCR Calculator, the LTV Calculator, and the Loan Sizer — the lesser of the three constraints governs final loan sizing.
Rate & Lending DisclosureInterest rates, loan terms, leverage levels, and pricing references shown on this page are estimates only, based on current Florida commercial real estate market conditions and lender feedback as of the page's last update. They are
not commitments to lend, are not loan approvals or pre-qualifications, and do not guarantee any specific loan terms or that financing will be available to any particular borrower or property. Actual interest rates, fees, leverage, amortization, prepayment terms, and other loan terms depend on borrower qualifications (credit, net worth, liquidity, experience), property characteristics, lender-specific underwriting requirements, third-party reports, and market conditions at the time of application. All loans are subject to lender credit approval, underwriting, and applicable federal, state, and local lending regulations. Linton Global Solutions is a Florida-licensed commercial real estate brokerage (FL Broker #BK703722); it is
not a lender. Financing is sourced through third-party lender relationships, and final loan terms are determined by the originating lender. This page does not constitute consumer credit advertising under Federal Reserve Board
Regulation Z (12 CFR Part 1026) and is intended for informational purposes only for commercial real estate professionals, investors, and owners considering commercial mortgage financing. Past loan terms or transactions do not guarantee future results.