Question
A developer wants to finance a project costing $1.85 million with a 20-year loan at an interest rate of 4.5 percent. The projects NOI is
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A developer wants to finance a project costing $1.85 million with a 20-year loan at an interest rate of 4.5 percent. The projects NOI is expected to be $121,000 during year 1 and the NOI, as well as its value, is expected to increase at an annual rate of 2 percent thereafter.
What will be the maximum loan-to-value (LTV) if the lender requires a minimum debt coverage ratio of 1.20 for year 1?
A developer wants to finance a project costing $1.85 million with a 20-year loan at an interest rate of 4.5 percent. The projects NOI is expected to be $121,000 during year 1 and the NOI, as well as its value, is expected to increase at an annual rate of 2 percent thereafter.
What will be the maximum loan-to-value (LTV) if the lender requires a minimum debt coverage ratio of 1.20 for year 1?
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Finance For Executives Managing For Value Creation
Authors: Gabriel Hawawini, Claude Viallet
7th Edition
1473778913, 978-1473778917
