Question
You can purchase a new apartment building for 1,800,000. The bank has quoted an 80% LTV, and a 1.30 DCR (Debt Coverage Ratio). The loan
You can purchase a new apartment building for 1,800,000. The bank has quoted an 80% LTV, and a 1.30 DCR (Debt Coverage Ratio). The loan would be amortized for 30 years, the annual interest rate is 3.75%. The annual NOI is $100,000.
Determine the maximum amount of the loan based on the DCR
a. 1,800,000
b. 1,440,000
c. 1,386,000
d. 144,000
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Financial Management For Public Health And Not-for-Profit Organizations
Authors: Steven A. Finkler, Daniel L. Smith, Thad D. Calabrese, Robert M. Purtell
7th Edition
1071835335, 978-1071835333
