-1.png){kind=small}
Operating Expense Ratio
Operating expense ratio divides operating expenses by effective gross income for the same period.
Operating expense ratio compares operating expenses with effective gross income for the same period. Fannie Mae’s DUS Insights calculation excludes replacement reserves from expenses, then divides that expense amount by EGI.
Property operations example: label the period, expense categories, and reserve treatment when comparing ratios across reports. Express the result as a percentage if the reporting format calls for one.
Source: Fannie Mae, DUS Insights Glossary.
Frequently Asked Questions
Can ratios with different expense definitions be compared directly?
First reconcile which expenses and periods each report includes. Different inputs can change the ratio even when operations have not changed.
More in Accounting & Finance
See all Accounting & Finance terms →Accounts Payable
Accounts payable are unpaid vendor balances for goods or services bought on credit.
Read definition →Additional Rent
Charges billed to a commercial or residential tenant beyond base rent, including CAM reconciliations, property taxes, insurance, and late fees.
Read definition →Amortization
Loan amortization is the repayment of principal over time through scheduled payments that also cover interest.
Read definition →Bad Debt Reserve & Delinquency Aging
The accounting methodology categorizing past-due receivables into 30/60/90-day aging buckets and provisioning an allowance for uncollectable rent.
Read definition →Base Year & Gross Up Provision
A commercial lease provision adjusting variable operating expenses to reflect 95-100% occupancy to ensure equitable pass-through billings.
Read definition →