An estimate of construction period interest is made by computing the monthly draw rate for construction...

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An estimate of construction period interest is made by computing the monthly draw rate for construction costs to be funded by the lender over the 12-month period. This is illustrated in Exhibit 16- 5. In summary, Exhibit 16-5 shows that the loan balance will increase each month by the amount of the project cost draws plus interest borrowed. The total ending balance, $9,001,416, will be equal to the total construction loan amount at the end of the 12-month period. This amount will be funded by the permanent lender, thereby taking out the construction lender at that time. In most cases, the permanent loan and the interim loan commitments are made for the same amount. EXHIBIT 16-5 Projected Loan Repayment Schedule for Rolling Meadows Center End of Month 0 1 2 3 4 S 6 7 8 9 10 11 12 Total S Loan Draws (a) Project Costs 0 1,557,938 1,557,938 1,557,938 1,557,938 259,656 259,656 259,656 259,656 259,656 259,656 259,656 259,656 $8,309,000 (b) Construction Interest Payments (e) (c) Loan Principal Balance Interest Reduction (d) 05 05 SOS 0 1,557,938 0 15,579 3,131,454 15,579 31,315 4,720,706 31,315 47,207 6,325,851 47,207 63,259 63,259 6,648,766 66,488 6,974,910 69,749 7,304,315 66,488 73,043 76,370 79,730 8,312,427 0 0 0 0 (1) Ending Loan Balance S 0 1,557,938 3,131,454 4,720,706 6,325,851 0 0 6,648,766 0 6,974,910 0 7,304,315 0 7,637,014 0 7,973,041 0 8,312,427 0 8,655,208 69,749 7,637,014 73,043 7,973,041 76,370 79,730 8,655,208 83,124 83,124 86,552 $9,001,416 $86,552 $9,001,416 S $692,416 0 An estimate of construction period interest is made by computing the monthly draw rate for construction costs to be funded by the lender over the 12-month period. This is illustrated in Exhibit 16- 5. In summary, Exhibit 16-5 shows that the loan balance will increase each month by the amount of the project cost draws plus interest borrowed. The total ending balance, $9,001,416, will be equal to the total construction loan amount at the end of the 12-month period. This amount will be funded by the permanent lender, thereby taking out the construction lender at that time. In most cases, the permanent loan and the interim loan commitments are made for the same amount. EXHIBIT 16-5 Projected Loan Repayment Schedule for Rolling Meadows Center End of Month 0 1 2 3 4 S 6 7 8 9 10 11 12 Total S Loan Draws (a) Project Costs 0 1,557,938 1,557,938 1,557,938 1,557,938 259,656 259,656 259,656 259,656 259,656 259,656 259,656 259,656 $8,309,000 (b) Construction Interest Payments (e) (c) Loan Principal Balance Interest Reduction (d) 05 05 SOS 0 1,557,938 0 15,579 3,131,454 15,579 31,315 4,720,706 31,315 47,207 6,325,851 47,207 63,259 63,259 6,648,766 66,488 6,974,910 69,749 7,304,315 66,488 73,043 76,370 79,730 8,312,427 0 0 0 0 (1) Ending Loan Balance S 0 1,557,938 3,131,454 4,720,706 6,325,851 0 0 6,648,766 0 6,974,910 0 7,304,315 0 7,637,014 0 7,973,041 0 8,312,427 0 8,655,208 69,749 7,637,014 73,043 7,973,041 76,370 79,730 8,655,208 83,124 83,124 86,552 $9,001,416 $86,552 $9,001,416 S $692,416 0

Answer rating: 100% (QA)

ANSWER Based on the provided information from Exhibit 165 here is a summary of the loan repayment sc... View the full answer