Question: A developer expects that her developed property will have a NOI of $2 million when stabilized and the permanent mortgage is underwritten. This developer expects

A developer expects that her developed property will have a NOI of $2 million when stabilized and the permanent mortgage is underwritten. This developer expects that the property cap rate will be 6% and that lenders will require a minimum DCR of 1.6 and will loan up to 60% of appraised value on a first mortgage. If the mortgage interest rate is 5%, payments are monthly, and the amortization period is 30 years, what is the maximum-sized loan the lender will advance?

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