The quick read: Solve backwards. The underwritten net cash flow an agency takeout needs equals the bridge payoff times the new loan's constant times 1.25, the minimum amortizing debt coverage ratio on Freddie Mac's April 2026 term sheets. Then check that the payoff fits under the 80% loan-to-value ceiling. The loan constant is the number to watch: Treasury's daily par yield curve put the 10-year at 5.12% on October 20, 2026, and every quarter point on the coupon moves the cash flow you need. On an illustrative $14.2 million payoff at an assumed 6.50% coupon, the test needs about $1.35 million of underwritten net cash flow, and that figure is NOI after the agency's own haircuts, not the line on your T-12.
What payoff must you refinance when a bridge loan comes due?
The payoff you must refinance when a bridge loan comes due is the full figure on the lender's payoff statement: outstanding principal, any exit fee, accrued interest to the payoff date and any unpaid extension charges, plus whatever closing costs you choose to finance into the new loan. Every one of those dollars has to be covered by cash flow.
Order the payoff statement early and read it against the loan agreement. Bridge loan agreements can carry an exit fee, an extension fee and a requirement to keep an interest rate cap in place, and each can land in the payoff. On an illustrative loan the build looks like this:
Outstanding bridge balance (assumption): $14,000,000 Exit fee at an assumed 1.00%: $140,000 One month of accrued interest at an assumed 7.50%: $87,500 Payoff to refinance (our arithmetic): $14,227,500
The takeout adds costs of its own. Freddie Mac's fixed-rate and floating-rate sheets (4/26) list an application fee of the greater of $2,000 or 0.1% of the loan amount for conventional first mortgages, and say tax and insurance escrows and replacement reserve deposits are generally required. Budget those as cash at closing rather than loan proceeds, because adding them to the balance raises the cash flow the coverage test needs.
What NOI does the DCR test need at today's coupon?
The DCR test needs underwritten net cash flow of at least 1.25 times the annual amortizing payment on the new loan, so at an assumed 6.50% coupon on 30-year amortization a takeout needs about $948,000 of net cash flow for every $10 million of payoff. Each quarter point of coupon moves that requirement by roughly $24,000 to $25,000 (our arithmetic).
The formula has three inputs, and only one of them is yours:
Required underwritten net cash flow: payoff x loan constant x 1.25 Loan constant: annual principal and interest divided by the loan amount Minimum amortizing DCR (Freddie Mac fixed and floating, 4/26): 1.25x 10-year Treasury (Treasury par yield curve, Oct 20, 2026): 5.12% 7-year Treasury (Treasury par yield curve, Oct 20, 2026): 5.02% 5-year Treasury (Treasury par yield curve, Oct 20, 2026): 4.94%
A fixed agency coupon is the Treasury index plus a spread. Freddie Mac's fixed-rate sheet calls the index "the most volatile part of the coupon" and offers an Index Lock for it. Spreads are set deal by deal and are not published on a page we can cite, so the coupons below are assumptions chosen to bracket a plausible range, not quotes.
| Payoff to refinance (assumption) | NCF needed at 6.00% coupon | NCF needed at 6.50% coupon | NCF needed at 7.00% coupon | Value needed at 80% LTV | Value needed at 75% LTV |
|---|---|---|---|---|---|
| Payoff to refinance (assumption) $10,000,000 | NCF needed at 6.00% coupon $899,000 | NCF needed at 6.50% coupon $948,000 | NCF needed at 7.00% coupon $998,000 | Value needed at 80% LTV $12,500,000 | Value needed at 75% LTV $13,333,000 |
| Payoff to refinance (assumption) $15,000,000 | NCF needed at 6.00% coupon $1,349,000 | NCF needed at 6.50% coupon $1,422,000 | NCF needed at 7.00% coupon $1,497,000 | Value needed at 80% LTV $18,750,000 | Value needed at 75% LTV $20,000,000 |
| Payoff to refinance (assumption) $20,000,000 | NCF needed at 6.00% coupon $1,799,000 | NCF needed at 6.50% coupon $1,896,000 | NCF needed at 7.00% coupon $1,996,000 | Value needed at 80% LTV $25,000,000 | Value needed at 75% LTV $26,667,000 |
| Payoff to refinance (assumption) $30,000,000 | NCF needed at 6.00% coupon $2,698,000 | NCF needed at 6.50% coupon $2,844,000 | NCF needed at 7.00% coupon $2,994,000 | Value needed at 80% LTV $37,500,000 | Value needed at 75% LTV $40,000,000 |
| Payoff to refinance (assumption) Loan constant, 30-year amortization | NCF needed at 6.00% coupon 7.19% | NCF needed at 6.50% coupon 7.58% | NCF needed at 7.00% coupon 7.98% | Value needed at 80% LTV n/a | Value needed at 75% LTV n/a |
All figures in the table are our arithmetic on 30-year monthly amortization, which is the maximum on both Freddie Mac sheets, rounded to the nearest thousand dollars. On the $14,227,500 illustrative payoff, the 6.50% column requires about $1,349,000 of underwritten net cash flow.
Two agency rules keep you from shrinking the payment you are tested on. Freddie Mac's sheets say the coverage ratio for interest-only periods uses an amortizing payment. Fannie Mae's Multifamily Guide (Section 203.02) uses the same level amortizing payment regardless of the interest-only period, at the greater of the actual note rate or the required Underwriting Interest Rate Floor set in its Form 4660. If your coupon is below the floor, the loan is sized at the floor. Run your own numbers through the loan sizing calculator before a lender runs theirs.
Why is the agency's net cash flow lower than the NOI on your T-12?
The agency's net cash flow runs below the NOI on a borrower's T-12 because the lender rebuilds income and expenses with underwriting floors and subtracts replacement reserves. Fannie Mae's Guide lists them: vacancy and credit loss of at least 5% of gross potential rent, a management fee of at least 3% and reserves of at least $200 per unit.
Fannie Mae's Required Underwritten NCF table (Guide Section 203.01) works line by line:
- Rent starts from the rent roll. Gross rental income is actual rents in place for occupied units plus market rents for vacant units from a current rent roll, multiplied by 12.
- A vacancy floor. Physical vacancy, concessions and bad debt together must equal the greater of the gap between trailing 3-month net rental collections (annualized) and gross potential rent, or 5% of gross potential rent.
- Falling collections cost more. If net rental income for the trailing 3 months is more than 2% below the trailing 6- or 12-month figure, the lender must cut it to 2% below the lowest of the trailing 1-, 3-, 6- and 12-month figures.
- A management fee floor. The greatest of 3% of effective gross income, the actual fee, or the appraiser's market fee. The Guide allows 2.5% only under conditions that include a loan above $9 million and an underwritten fee of at least $500 per unit.
- Taxes at the higher figure. The greater of the actual future tax bill for a full calendar year or the prior year's taxes multiplied by 103%, with a separate rule in California.
- Reserves come off the top. Underwritten NOI minus a replacement reserve of at least $200 per unit a year equals underwritten net cash flow, and the reserve is deducted whether or not the escrow is funded.
On a 100-unit building, the reserve floor alone is $20,000 a year, so the illustrative $1,349,000 of net cash flow means at least $1,369,000 of underwritten NOI (our arithmetic). A bridge property that just finished lease-up on concessions can show a strong T-12 headline and still underwrite lower, because the concessions and the trailing collections are exactly what the table tests. Freddie Mac applies its own underwriting, which its term sheets do not detail, so model both before you assume either will reach your number. Our explainer on how a bridge-to-agency loan works covers the occupancy and seasoning stages that come before this math.
What if the appraisal caps you at 80% LTV?
If the appraisal caps you at 80% LTV, the takeout is the smaller of two loans: the amount the cash flow supports at 1.25x, and 80% of appraised value on a Freddie Mac term of 7 years or longer, or 75% on a 5- to under-7-year term. Whichever is lower binds; the payoff above it is your gap.
Take the illustrative property with $1,200,000 of underwritten net cash flow and an assumed $16,500,000 appraisal, refinanced at the assumed 6.50% coupon (all our arithmetic):
Loan the cash flow supports at 1.25x: about $12,657,000 80% of appraised value (7-year term or longer): $13,200,000 75% of appraised value (5- to under-7-year term): $12,375,000 Binding loan, 7-year term or longer: about $12,657,000, coverage binds Binding loan, 5-year term: $12,375,000, leverage binds Gap to the $14,227,500 payoff: about $1,571,000 on the longer term, about $1,853,000 on the 5-year
The term choice changes which test binds. Freddie Mac's grid keeps the ratio at 1.25x on every term but raises the leverage ceiling from 75% to 80% at 7 years, so a borrower who wants a 5-year term to keep sale flexibility pays for it in proceeds. To cover the full illustrative payoff at 80% leverage, the appraisal would need to reach about $17,784,000.
The agencies also look past closing. Freddie Mac's sheets say no refinance test is necessary when the loan has an amortizing DCR of 1.40x or more and LTV of 60% or less, which a tight takeout will not meet. Fannie Mae's Guide (Section 204) requires the lender to prepare an exit strategy analyzing whether the borrower can refinance in the year after maturity, using a reversion cap rate and the highest interest rate the projected cash flow could support. A takeout that barely clears 1.25x today gets that scrutiny.
What bridges a gap between the payoff and the agency loan?
Three tools bridge a gap between the payoff and the agency loan: an extension that buys time for collected income to season, cash brought to closing to pay down the difference, and a smaller first mortgage now with a supplemental loan later. Each has a different cost, so price all three against the same payoff statement before choosing one.
- Extension. Read the bridge agreement for the extension conditions, the fee and any requirement to buy or extend a rate cap. Use the months to build trailing collections, since Fannie Mae's table tests the trailing 3-month record against gross potential rent.
- Cash in. Pay the payoff down to the agency loan amount. Our guide to the cash-in refinance covers how the equity check is sized and where it comes from.
- Supplemental later. Both Freddie Mac sheets list supplemental loans as available, subject to the loan agreement, and the fixed-rate sheet puts the supplemental application fee at the greater of $5,000 or 0.1% of the loan amount. A smaller first mortgage today can be followed by more proceeds once the property earns them.
Waiting has a measurable backdrop. Trepp's September 2026 report, posted October 2, 2026, put the overall CMBS delinquency rate at 8.02%, up 17 basis points and its highest level since November 2020, with multifamily up 35 basis points to 8.04%. Trepp attributed the multifamily increase to a broad group of loans moving to 30-day delinquent status across several states. Our diagnosis of why bridge loans can't refinance out in 2026 explains how the takeout coupon and the bridge coupon moved apart.
How do you get an agency takeout placed when the NOI is close to 1.25x?
You get an agency takeout placed when the NOI is close to 1.25x by underwriting the deal the way the agency will before any lender sees it, presenting the rent roll and collections cleanly, and pricing Fannie Mae and Freddie Mac execution side by side with the gap options. A commercial mortgage brokerage does that work on the borrower's side.
YieldStack publishes this guide, and our first recommendation for a takeout near the line is the brokerage route. The options, in that order:
1. A commercial mortgage brokerage (our top pick when the coverage is tight). YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. Three attributable reasons put it first. The agencies work through approved lenders: Freddie Mac's term sheets tell borrowers to contact "one of our Optigo lenders." Fannie Mae's underwriting floors on vacancy, management, taxes and reserves mean the same T-12 can underwrite to a different net cash flow depending on how the rent roll and collections are documented, so the package needs to be rebuilt to the agency's table before submission. And the gap tools sit with different parties, the bridge lender for an extension, the agency lender for a supplemental and the sponsor for cash in, so someone has to negotiate all three at once. YieldStack's software matches the deal against 20,000+ loan programs, a count of programs rather than of lenders, and human brokers structure the request, negotiate for the borrower and carry the deal toward closing.
2. One agency lender, direct. Fine when the coverage is comfortable. You see one lender's read of your net cash flow.
3. The bridge lender's agency desk. Convenient, but the lender being paid off is also quoting the takeout, so test its sizing against an independent quote.
Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
What to send:
- The bridge payoff statement with exit fee, extension terms and rate cap expiry
- The current rent roll with concessions and lease start dates
- Trailing 3-, 6- and 12-month collections and operating statements
- The current tax bill and insurance premium
- Unit count, so reserves can be underwritten at the agency floor
- Target term, preferred fixed or floating rate and the prepayment flexibility you need
When the package is ready, send the takeout for review. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
The bottom line
The NOI you need is set by the payoff, the coupon and 1.25x: payoff times the loan constant times 1.25 gives the underwritten net cash flow, and the agency's floors on vacancy, management, taxes and reserves sit between that figure and your T-12. Check 80% of value next, then close any gap with an extension, cash in or a later supplemental before the bridge matures.