Student housing loan sizer
A student housing loan is the smallest of three numbers: what the value supports at the lender's LTV, what the income supports at its DSCR, and, if it uses one, what the debt yield test allows. Enter the property by the bed and see all three.
Presets: Freddie Mac Multifamily "Student Housing" product summary, data as of December 31, 2025 (mf.freddiemac.com). Vacancy floor: Fannie Mae Multifamily Guide Part III, Chapter 1, section 104, effective September 28, 2026. Sources.
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How the three tests work
LTV caps the loan at a share of value. DSCR caps it so net operating income covers the annual payment by the required multiple; at a 1.30x minimum, $1,300,000 of NOI supports $1,000,000 a year of principal and interest. Debt yield is NOI divided by the loan, with no rate in it, which is why many bridge lenders set a debt yield floor.
Which test binds depends on the cap rate and the interest rate. Work the sample: 600 beds at $900 for 12 months is $6,480,000 of rent. Add $180,000 of other income and take 5% vacancy off the rent, and effective income is $6,336,000. Subtract $2,520,000 of expenses and $90,000 of reserves, and NOI is $3,726,000. At 75% of $72,000,000 the LTV loan is $54,000,000. That value is a 5.2% cap rate, and at 1.30x on 30-year amortization the DSCR test cuts below $54,000,000 at any rate above about 3.4%.
What agencies add on top
Freddie Mac wants the property more than 50% student-occupied, under 2 miles from campus or on a transit route, and on 12-month leases, with parental guarantees unless the risk is covered another way. Dorm-style buildings with meal plans or shared bathrooms are out. Fannie Mae's Dedicated Student Housing rules require a campus of at least 10,000 students, mostly full-time, no food service, and at least 80% of units on 12-month leases. Check any campus's enrollment on its university page.
Leasing season changes the closing date
Freddie Mac's summary describes a three-month debt service reserve when the commitment is issued between January 1 and the start of the school year, unless the property's pre-leasing meets the waiver tests. The waivers turn on leasing: pre-leasing already at the underwritten stabilized occupancy, a refinance with two stable cycles, or LTV and DSCR at least 5% and 0.05x inside the limits.
Common questions
Why size student housing by the bed instead of by the unit?
Because that is how it leases. A four-bedroom unit signs four separate leases at a rent per bed, so income, vacancy and reserves all scale with beds. Fannie Mae accepts by-the-bed underwriting for Dedicated Student Housing once a property has two years of operating statements kept that way.
What DSCR do agency student housing loans need?
Freddie Mac's student housing summary (data as of December 31, 2025) shows a 1.30x minimum DSCR at every LTV tier, 0.05x above its conventional multifamily loans. Fannie Mae's current Guide sections on student housing do not state a DSCR.
Does HUD insure student housing?
Not purpose-built student housing. HUD's MAP Guide says insured projects cannot be designed solely for student occupancy, and loans in college areas must be underwritten at family-housing rents, not per-student rents.