For the Same Property as Above, Suppose the Underwriting Criteria

question 23

Multiple Choice

For the same property as above, suppose the underwriting criteria is a maximum loan/value ratio LTV) of 75%, and we estimate property value by direct capitalization using a rate of 11% on the stated NOI. By this criterion what is the maximum loan amount?

• A) $2,789,406
• B) $3,409,091
• C) $3,844,614
• D) $4,000,000
• E) $4,139,619

---

Definitions:

Living Wage

A wage level that is high enough to maintain a normal standard of living.

Employment

The condition of having paid work or the number of people employed in an economy or specific sector.

Wage

The fixed regular payment, typically calculated on an hourly, daily, or piecework basis, made by an employer to an employee for their labor or services.

Deadweight Loss

A cost to society created by market inefficiency, which occurs when supply and demand are out of equilibrium.