Status: implemented

Implemented — this change has shipped.

RFC 0033: Scope capital_stack to one point in time

Summary

Format § 4.24 models the capital stack as concurrent typed tranches: amount is "the committed dollar amount", position orders seniority. Nothing says when. A ground-up development deal carries two senior facilities in time sequence — the construction loan funds the build and is retired by the permanent takeout at stabilization — and § 4.24 as written forces that producer to choose between double-counting the senior capital (stating both as concurrent tranches) and misstating the deal (omitting one). This RFC states the scope that § 4.24's own verification semantics already imply: the stack describes one point in time — the capitalization contemporaneous with the NOI the sizing verbs read. For a deal underwritten to stabilization that is the stabilized (permanent) stack; facilities retired before that point MUST NOT appear as concurrent tranches. Phased stacks are deferred to the Phase 2 multi-period spine alongside the staged-funding work RFC 0026 § D already parked there.

Motivation

Raised by the underwriter.cc app team (their tracking id UPSTREAM-003, raised 2026-09-01 while implementing § 4.24): their engine currently suppresses the entire capital_stack section for any deal whose sources carry construction debt, because the spec gave them no honest way to state it. On their canonical ground-up deal, stating the construction loan (~$17.5M) and the permanent takeout (~$18.2M) as concurrent layers overstates senior capital by roughly the whole construction balance — which misstates the attachment point of every layer above, the exact harm the section exists to prevent. Omitting either facility instead misstates the deal. Their ask named three acceptable resolutions: (1) a temporal dimension on tranches, (2) an explicit stabilized-only scope statement, or (3) one stack per phase.

The scope statement is not arbitrary — it is the only reading under which § 4.24's sizing table is coherent today. Every coverage verb recomputes against noi_model.net_operating_income, the stated operating year. A construction loan never coexists with stabilized NOI; coverage over it is not a conservative approximation but a category error. The section already knows this about funding — RFC 0026 § D explicitly defers staged funding, future-funding holdbacks, and as-is/as-stabilized dual sizing to the Phase 2 multi-period spine. What it never said is what that deferral means for the producer holding a construction loan today.

Proposed change

Adopt the asker's option (2), as spec text in § 4.24's normative rules — option (1) (a phase field with per-phase reconciliation and sizing rules) and option (3) (discriminated per-phase stacks) are real designs, but both need the multi-period spine to verify anything, and RFC 0026 already sequenced that work. One rule added to the § 4.24 normative list, after the OPTIONAL rule:

• The stack is one point in time. The section states the capitalization contemporaneous with the operating year the sizing verbs read (noi_model.net_operating_income) — for a deal underwritten to stabilization, the stabilized (permanent) stack. Facilities that do not coexist at that point MUST NOT be stated as concurrent tranches: a construction loan and the permanent takeout that retires it are one senior position in time sequence, and stating both double-counts the senior capital and misstates every attachment point above it. A producer underwriting a ground-up development SHOULD emit the stabilized stack — the takeout senior plus the layers that survive into stabilization — and MUST NOT add the retired construction facility to it. Phased stacks (construction → takeout, draw schedules, as-is/as-stabilized dual sizing) are deferred with the multi-period spine (RFC 0026 § D; RFC 0033).

A bridge tranche is unaffected and remains stateable: a deal underwritten during its bridge period states the bridge-period capitalization, which is the point in time its NOI describes. The rule forbids mixing points in time, not any particular facility class.

Compatibility analysis

No shape change: no schema field is added or removed, and every existing conforming document remains conforming — the rule forbids a combination (temporally disjoint facilities as concurrent tranches) that no shipped example, fixture, or known document states. The format version does not move ("every format change is additive at 1.x", and this adds a constraint on a combination that was previously unstatable honestly rather than a new construct). Producers that suppressed the section for construction-carrying deals can now emit the stabilized stack and be conforming; that is a strict widening of what they can say.

Conformance impact

Not mechanically checkable at this version: tranches carry no temporal marker, so a validator cannot distinguish a construction loan stated alongside its takeout from two genuinely concurrent senior facilities (an A/B structure states two notes at distinct positions and is legal). The rule binds producers the way § 4.24's "an agent MUST NOT invent a tranche rate" already does — normatively, without a code. When the Phase 2 work adds a temporal marker, the marker's validator inherits this rule as its first check. No corpus change.

Reference implementation

No code. verifyCapitalStack already recomputes every sizing figure against the single stated operating year; this RFC makes the spec say which stack that year implies. The spec bullet lands in the same commit as this document.

Alternatives considered

• A temporal dimension on tranches (phase: construction | permanent, or active_from/retired_by) — the eventual right answer for development underwriting, but per-phase reconciliation (which phase does CC-03 check against debt_structure?) and per-phase sizing need the multi-period cash-flow spine RFC 0026 § E already scopes to Phase 2. Landing the field without the spine would ship syntax whose semantics nothing can verify.
• One stack per phase (discriminated) — same dependency, plus a shape change to the section and its schema for a case one scope sentence covers.
• Say nothing — leaves the standard's first serious adopter suppressing a whole section on development deals, and every future producer re-deriving the same choice between double-counting and omission.

Unresolved questions

• Where the temporal marker eventually lives — on the tranche (active_from/retired_by) or on the stack (one stack per phase) — is left to the Phase 2 RFC, which will have the multi-period spine in hand and with it the reconciliation and sizing semantics either design needs.
• Whether sources_uses needs a matching statement. A ground-up deal's sources legitimately name the construction facility (it funds the build); the stack states the stabilized capitalization. The generalized CC-03 reconciles the stack's senior tranche with debt_structure and the sources_uses senior bucket, which for a ground-up deal underwritten to stabilization should all describe the takeout. This RFC believes that is already the natural reading, but flags it for the Phase 2 author.

Prior art

• Lender underwriting practice: a permanent-loan sizing memo underwrites the stabilized capitalization; the construction facility appears in sources and uses and in the takeout analysis, not as a concurrent layer of the stabilized stack.
• RFC 0026 § D of this project: staged funding and as-is/as-stabilized dual sizing were already deferred to the multi-period spine — this RFC completes that deferral by stating what v1 does describe.