A property's income and expense statement for the most recent twelve months, usually shown month by month.
A calendar-year statement can be eleven months stale by the time a lender sees it. The T-12 fixes that by rolling the window forward to the last full month, so it captures a recent rent increase, a new tax bill or a vacancy that a year-end statement would miss.
Lenders ask for it next to prior full years, not in place of them. HUD’s multifamily underwriting guide, for one, bases expenses for an existing project mainly on the past three years of operation and also has lenders provide the trailing 12 months of income and expenses for comparison. The pattern across months matters as much as the total: a lender looks for one-time items, missing months, and expenses paid late or not at all. The OCC handbook points out that statements kept on a cash basis can understate expenses, for example when a tax bill was not paid in the period.
The T-12 is a starting point, not the underwritten number. A lender will add a vacancy factor, a management fee and replacement reserves even where the owner pays none, and arrive at its own net operating income. Send the T-12 in the same format each time, with the rent roll for the same month end.
How it shows up in the data here
Not in the data. Property operating statements are private documents and no public filing on this site carries them. Bank call reports show loan balances by category, and HMDA shows loan terms, not property income. For the lenders themselves, see multifamily lenders and investor CRE lenders.
Go further
- DSCR calculator: Coverage from the income and expenses you enter.
- Multifamily lenders: Lenders with multifamily loans on the public record.
- DSCR calculator: Cash flow over debt service. Type the cash flow and the loan terms, see the ratio and the cushion before it falls to 1.00x.
- Debt yield calculator: Cash flow over the loan. The one ratio that ignores the rate, the amortization and the cap rate.
- Multifamily loan checklist for 5+ unit properties: A larger apartment loan can go to five kinds of lender. They want much the same package. They differ on recourse, term, prepayment, speed and what they ask of the sponsor.
- Investor commercial real estate loan checklist: On an investor property the rent pays the loan. The package is the evidence for the rent: who pays it, for how long, what it costs to collect, and who stands behind the borrower if it stops.
- How bankers evaluate a commercial loan deal: A credit officer asks one question five ways: how will this loan be repaid, and what happens if it is not? Knowing the five tests lets you size a request before you send it.
Related terms
- Rent roll: A list of every unit or space in a property showing the tenant, the rent, the lease dates and what is vacant, as of a stated date.
- Net operating income (NOI): A property's annual income minus its operating expenses, before loan payments, income taxes and depreciation. It is the top number in DSCR and debt yield.
- Effective gross income (EGI): The income a property is expected to produce after subtracting an allowance for vacancy and for rent that will not be collected.
- Pro forma: A projection of a property's or project's future income, expenses and cash flow, built on stated assumptions and not on past results.
- Replacement reserves: Money set aside, or an expense assumed by the lender, for periodic replacement of capital items such as roofs, heating and cooling systems and parking lots.
- Debt service coverage ratio (DSCR): Net operating income, or business cash flow, divided by the loan payments due in a year. It shows how many dollars come in for each dollar of debt service.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.