Multifamily Underwriting Basics
The NOI the lender will use — not the NOI on the offering memo.
A gated PDF primer on NOI, DCR, cap rate, cash-on-cash, and CMHC-normalized expenses for 5+ unit Canadian files, including why you do not zero replacement reserve.
Stop losing deals at the NOI line
If the seller used 2% vacancy and you use CMHC + 0.5 pp, proceeds change. This page is that gap.
Right DCR for the program
Printed so you never size Standard at 1.10.
Feeds the max-loan calculator
Once you have CMHC-style NOI, run the MLI max-loan tool instead of a back-of-envelope LTV.
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NOI
EGI minus operating expenses.
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DSCR / DCR
Select standard rental 1.10. Standard 1.30 (5-year) or 1.20 (10-year).
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Cap rate
NOI ÷ price.
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Cash-on-cash
Annual cash flow ÷ cash in.
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MLI Select
Up to 95% LTC / 85–95% LTV by points.
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MLI Standard
Up to 85% LTV.
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Conventional
Typically 75% LTV.
- Why add 0.5% to vacancy?
- LendCity™ CMHC screening uses market vacancy plus 0.5 percentage points when normalizing NOI.
- What is greater-of expenses?
- For each line, use the higher of trailing actuals and the CMHC regional benchmark (PUPA or % of EGI).
Email to download
Name and email. We send the file and can follow up on the matching desk.