The requirements for obtaining a REMIC loan vary depending on the type of loan and the lender. Generally, lenders look at two major metrics when deciding whether to approve a REMIC loan; DSCR (Debt Service Coverage Ratio) and LTV (Loan-to-Value). Additionally, lenders typically require a borrower to have a net worth of at least 25% of the entire loan amount, and a liquidity of at least 5% of the loan amount. Furthermore, a debt yield metric is determined by taking the net operating income of a property and dividing it by the total loan amount. This helps determine how long it would take a lender to recoup their losses if they had to foreclose on the property.
In addition, REMICs are typically governed by pooling and servicing agreements (PSAs), which detail the right and responsibilities of the various parties involved in the loan pooling and servicing process, including the borrower, the master servicer, and the special servicer, among others. PSAs may include various restrictions on properties funded with loans that are currently part of REMICs. For instance, CMBS borrowers may not be able to renovate or rehabilitate their property if the potential renovation would significantly increase the value of the property.