1. Which of the following statements are TRUE? A. In commercial underwriting, the lender focuses on the income from the property as well as the applicant's general financial strength and track record. B. The underwriting process for commercial properties is identical to that of residential properties. C. The basis of commercial lending policy is to lend on property that has sufficient annual revenue t pay a portion of property operating costs as well as the mortgage payments, while still having a margin of safety. D. The revenue and expense data used in commercial underwriting may not be derived from annual projected cash flows, and must instead be based on actual historical cash flows. (1) All of the above (2) Only A and C (3) Only A, C, and D (4) Only B and D THE NEXT TWO (2) QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION: Spencer, a mortgage lender, has received an application for a first mortgage loan on an apartment building that will generate a gross potential rental income of $80,000 per year. Market conditions indicate that a 5% vacancy allowance and a 2% bad debt allowance are appropriate for this type of building and for this level of rents. The landlord's share of operating expenses is expected to be $16,000 per year. Spencer requires a safety margin of 25% of net operating income. 2. What is the maximum monthly mortgage payment that could be made using the safety margin constraint? (1) $3,750,00 (2) $3,650.00 (3) $4,866.67 (4) $4,550,00 3. Spencer wishes to calculate the maximum loan the property will support given current mortgage rates of 6% per annum, compounding semi-annually, with a 25 -year amortization and monthly payments. What is the largest loan the net operating income will support, rounded to the nearest ter dollars? (1) $586,110 (2) $570,480 (3) $638,880 (4) $683,340