Question: We start with the same scenario. Matt is a real estate developer and owns a strip mall in Canton, MI. The property recently appraised and

We start with the same scenario. Matt is a real estate

We start with the same scenario. Matt is a real estate developer and owns a strip mall in Canton, MI. The property recently appraised and the appraisal value was $13,500,000 We will now add in Debt Service Coverage. The center is doing very well and is 100% occupied by four tenants. The center brings in $82,000/month in rental revenue and $18,000/month of tenant reimbursements. Annual expenses are $300,000. The borrower has requested a loan amount of $9,750,000. Given market conditions, loan terms will be 4.00% fixed/25yr amortization. Based on a policy minimum 1.20x Debt Service Coverage Ratio (4.00% interest rate and 25yr amortization) and 70% maximum Loan to Value, what is the maximum loan that you can provide for this property? a. $9,750,000 O b. $9,500,000 O c. $9,450,000 O d. $9,000,000

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