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?

Answer rating: 100% (QA)

To determine the maximumsized loan the lender will advance we need to calculate the loan amount base... View the full answer