How should a lender treat a C-PACE assessment senior to the mortgage in DSCR and LTV math?

Treat a C-PACE assessment that sits senior to the mortgage as senior debt in the sizing math. Add its annual assessment payment to debt service when computing DSCR, and add its balance to the loan amount when computing combined LTV. Sizing the mortgage as if the C-PACE did not exist overstates coverage and understates leverage. How the math changes - DSCR = NOI / (mortgage debt service + annual C-PACE assessment). - Combined LTV = (mortgage balance + C-PACE balance) / property value. - Debt yield on total debt = NOI / (mortgage + C-PACE). Example A property with 1,000,000 dollars of NOI, a mortgage with 700,000 dollars of annual debt service and a C-PACE assessment of 100,000 dollars a year: mortgage-only DSCR is 1.43×, but true coverage is 1,000,000 / 800,000 = 1.25×. What else to check 1. Consent: mortgage lenders typically must consent to a senior C-PACE lien; confirm it was given. 2. Term: C-PACE often runs 20 years or more, longer than the mortgage. 3. Transfer: the assessment usually stays with the property on sale, which affects the exit. 4. Default treatment: only the delinquent installments are usually senior, not the full balance, but this varies by program. 5. NOI effect: the improvements financed may lower operating costs; credit that saving only with evidence. Why it matters Coverage covenants and refinance sizing set on mortgage-only numbers can fail as soon as the assessment is counted. How Titleman handles it Titleman reads the loan documents and the assessment terms, includes the C-PACE in DSCR and combined LTV, and shows the math with each input's source in your model. See Deal Review: https://titleman.ai/products/deal-review