Stage 1 — Deal Screener
The Deal Screener is TROV Blueprint's acquisition underwriting engine. It answers one question: Should you buy this property at these numbers? It runs before the multi-year proforma — fast enough to screen dozens of listings, rigorous enough that the numbers carry into Stage 2 unchanged.
Loan Sizing — Three Binding Constraints
Every loan type in TROV Blueprint is sized by whichever constraint binds first — the lowest permissible loan amount wins. This mirrors how lenders actually underwrite: you don't get the best of three independent calculations; you get the most restrictive one.
DSCR Constraint
Formula: Loan = (NOI ÷ DSCR Requirement) ÷ Debt Yield
Where: NOI = net operating income (annual). Debt Yield = (Interest Rate + (1 ÷ Loan Term in years)). The DSCR requirement is lender-specific — typically 1.0–1.25 for investment properties.
This constraint asks: "If I borrowed this much, could the property's income still cover the debt service at the lender's required cushion?"
LTV Constraint
Formula: Loan = Purchase Price × Max LTV
Typical ranges: 75–80% for conventional investment, up to 96.5% for FHA owner-occupant, 70–80% for DSCR non-QM.
The simplest constraint — how much will the lender put up as a percentage of value?
Debt Yield Constraint
Formula: Loan = NOI ÷ Min Debt Yield
Typical minimums: 8–10% for commercial-style underwriting. Higher debt yield requirements mean lower maximum loan amounts.
Debt yield measures raw income return on the loan balance — a "stress test" that works even when cap rates compress. DSCR lenders use it as a backstop.
Monthly PITI + Mortgage Insurance
Once the loan is sized, the tool builds the full monthly housing payment:
- PI (Principal & Interest): Standard amortizing payment from loan amount, rate, and term.
- T (Taxes): Annual property taxes ÷ 12.
- I (Insurance): Annual hazard insurance ÷ 12.
- MIP/PMI: FHA annual MIP (declining balance, cancellable at LTV ≤ 78% after year 11 for ≤90% LTV loans) or conventional PMI (fixed rate on original balance until LTV threshold).
Monthly Outflow adds HOA, owner-paid utilities, and lawn/trash/water to PITI + MI — this is the true monthly operating burden before debt service on other obligations.
FHA Annual MIP Rates (30-Year, ≤$726,200)
| LTV Band | Annual MIP | Duration |
|---|---|---|
| ≤ 90% | 0.50% | 11 years, then cancellable at 78% LTV |
| 90.01% – 95% | 0.50% | Full loan term |
| > 95% | 0.55% | Full loan term |
Source: HUD 4000.1 Appendix 1.0 (03/20/2023)
Pass/Fail Thresholds
The screener evaluates six dimensions. A deal must pass all six to receive a green light:
| Metric | Pass Condition | What It Measures |
|---|---|---|
| DSCR | ≥ Threshold (default 1.25) | NOI ÷ Annual Debt Service |
| Cashflow | > $0/month | True cashflow after all expenses |
| LTV | ≤ Threshold (default 96.5%) | Loan ÷ Purchase Price |
| Debt Yield | ≥ Threshold (default 8%) | NOI ÷ Loan Balance |
| Breakeven Occ | ≤ Threshold (default 75%) | Occupancy needed to cover costs |
| OpEx Ratio | ≤ Threshold (default 50%) | Operating Expenses ÷ EGI |
All thresholds are adjustable in Deal Inputs — defaults reflect conservative investment underwriting, not lender minimums.
Named Ranges and Verification
Stage 1 outputs in TROV Blueprint use stable named fields that stay consistent across the app. The TypeScript engine is the source of truth for those values at acquisition screening. This isn't casual documentation — it's a verification contract for financial outputs.
Automated tests compare the engine against frozen ground-truth datasets within floating-point tolerance. If results drift, the build fails.