Balloon Risk Refinance Gap Calculator

Balloons may exceed refi. This calculator sizes gap.

Balloon amount due

Property value at maturity

Max refi LTV %

NOI

Refi rate %

Refi shortfall

$820,000

LTV proceeds

$8,400,000

DSCR proceeds

$7,680,000

How the math works

Refi proceeds = min(LTV-constrained, DSCR-constrained). Shortfall = balloon − proceeds.

$8.5M balloon on $12M value: LTV at 70% = $8.4M, DSCR at 1.25 with $720k NOI at 7.5% = $7.68M. Refi proceeds $7.68M (DSCR-constrained), shortfall $820k. Needs capital call or secondary financing.

How to Use

Enter balloon amount due.
Enter property value at maturity.
Enter max refi LTV %.
Enter DSCR constraint NOI.
Enter DSCR constraint rate.
Read refi shortfall.

Frequently Asked Questions

Refi constraints?

Two constraints: LTV (75% typical commercial, 80% multifamily) and DSCR (1.25-1.35 for stabilized). Loan proceeds = min of LTV-driven and DSCR-driven. Higher rates at refinance squeeze DSCR-driven proceeds — common in rising-rate environments.

Closing gap?

Shortfall between balloon + closing costs and refi proceeds. Sources: reserves, pref equity, seller note rollover, owner capital call, bridge loan, partial sale. Each has tradeoffs — plan 12-18 months ahead.

Plan B?

Extension (if lender willing, fee ~1% of loan). Forbearance with modified terms. Loan sale to distressed buyer. Short sale or deed-in-lieu. Outcomes worsen in sequence — early action critical.