Debt Yield Covenant Cure Calculator

Debt yield covenants require higher NOI or lower loan balance.

NOI

Loan balance

Covenant debt yield %

Paydown required

$6,111,111

Current debt yield

0.078%

Max loan at covenant

$38,888,889

How the math works

Max loan at covenant = NOI / covenant %. Paydown = current loan − max.

$3.5M / 9% = $38.9M max. Current $45M − $38.9M = $6.1M paydown required.

How to Use

Enter NOI.
Enter current loan balance.
Enter covenant debt yield %.
Read paydown required.

Frequently Asked Questions

Debt yield covenant?

NOI / loan balance × 100. Lender minimum threshold (typically 8-12% for office, 10-14% for multifamily, 9-12% for industrial). Below threshold triggers cure or default.

Why debt yield?

Measures loan's standalone ability to repay without refinance. DSCR depends on rate/amortization; debt yield captures NOI adequacy regardless of rate. Lenders increasingly prefer debt yield over DSCR for cycle-robust underwriting.

Cure options?

Cash flow sweep (best for lender). Partial paydown from equity. Additional mezzanine debt paying down senior. Property sale partial. Each has different covenants and restrictions.

What documentation matters here?

Written leases, move-in/move-out inspections with photographs, ledger entries showing every payment and charge, served notices with proof of service, and contemporaneous emails or texts. Courts weigh written evidence heavily; informal understandings rarely stand. Institutional operators run a monthly file audit to catch gaps before they matter. Good paper trails recover most of what's owed.