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Prepayment & Exit · Institutional Underwriting Standard · azcarcrashhelp.com

3-2-1 Step-Down Prepayment Penalty

Bottom Line Up Front (BLUF): Ideal for value-add BRRRR and medium-term rental investors who anticipate refinancing or selling in Years 3–4 without paying a Year-4 or Year-5 penalty.

Underwriting Formula / Rule

Months 1–12: 3% | Months 13–24: 2% | Months 25–36: 1% | Month 37+: 0%.

Wholesale Shelf Benchmark

Available across 90%+ of wholesale DSCR shelves.

Frequently Asked Underwriting Questions

Does a 3-2-1 prepay allow partial principal curtailment?

Many wholesale notes allow paying down up to 20% of the original principal balance per year without triggering the prepayment fee.

Explore Related Loan Program →Test Your Scenario on Exception Desk →Open Underwriting Calculators →

Arranged by Loan Daddy LLC (NMLS #2827624 · (480) 485-1229 · quotes@loandaddy.ai). Business-purpose investment properties only.

3-2-1 Step-Down Prepayment Penalty — Definition, Formula & Wholesale DSCR Guidelines | azcarcrashhelp.com