The ratio of a property's net operating income to its annual debt service. A DSCR of 1.25x means the property generates 25% more income than needed to cover loan payments. Most LifeCo lenders require 1.20x–1.30x minimum.

NOI divided by loan amount. The metric that matters most to institutional lenders — it's independent of interest rate and amortization. A 9% debt yield tells a lender it could foreclose, own the asset, and earn a 9% cash return. Most LifeCo lenders want 8%–10%+.

The loan amount as a percentage of appraised value. LifeCo lenders typically lend up to 65%–75% LTV on stabilized assets, though some have Core+ programs up to 80%. A lower LTV signals less risk to the lender — and usually means better pricing.

The lender's recourse is limited to the collateral property only. If the loan defaults, the lender cannot pursue the borrower's personal assets or other holdings. Most LifeCo permanent loans are non-recourse with standard carve-outs for fraud, environmental issues, and voluntary bankruptcy.

A prepayment mechanism common in CMBS loans where the borrower replaces the loan collateral with a portfolio of government securities that replicates the loan's cash flows. Often more expensive than yield maintenance but allows property sales to remain clean. LifeCo loans typically use yield maintenance instead.

The margin above the corresponding U.S. Treasury rate (e.g., 10-year Treasury for a 10-year loan). LifeCo lenders price at a spread over Treasuries — currently ranging from ~120 bps to 400+ bps depending on asset type, market, and leverage. The spread reflects credit risk and liquidity premium.

A defining advantage of LifeCo lending: the interest rate is locked when the loan application is submitted, not at closing. This eliminates rate risk during the 60–90 day underwriting and closing period — a material benefit when rates are volatile.

A prepayment penalty that compensates the lender for lost interest income if the loan is paid off early. Calculated as the present value of remaining loan payments discounted at a Treasury rate. The penalty ensures the lender earns its originally underwritten yield — hence "yield maintenance."

Revenue Per Available Room — the product of average daily rate (ADR) and occupancy rate. The key top-line metric for hotel underwriting. Lenders compare your property's trailing 12-month and YTD RevPAR against competitive set hotels (STR comp set) to assess market positioning and NOI sustainability.

Furniture, Fixtures & Equipment reserve — a set-aside (typically 3%–5% of revenue) for ongoing capital expenditures: replacing carpets, FF&E, and mechanical systems. Lenders require this as an operating expense line in the underwritten NOI. Understating the reserve inflates NOI and leads to declined deals.

Net Operating Income adjusted to reflect a fully leased, stabilized asset — not a trailing snapshot. Lenders underwrite to stabilized NOI, which means they may give credit for signed leases not yet commenced but will also haircut in-place rents they view as above-market. This is where deals get made or killed.

A structure where a mortgage banking firm (like Largo Capital) acts as the origination and servicing arm for a pool of institutional lenders. The lender sets credit and pricing parameters; the correspondent handles deal sourcing, underwriting review, closing, and ongoing servicing. Borrowers benefit from access to multiple lenders through one relationship.