For the Same Property as Above, Suppose the Underwriting Criteria

question 4

Multiple Choice

For the same property as above, suppose the underwriting criteria is a maximum loan/value ratio LTV) of 80%, and we estimate property value by direct capitalization using a rate of 8% on the stated NOI. By this criterion what is the maximum loan amount?

• A) $8,000,000
• B) $9,000,000
• C) $10,000,000
• D) $11,000,000

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Definitions:

Coping

The process of managing stressful or difficult situations by making efforts to solve problems or by seeking to minimize their effects.

Type A

A personality type characterized by competitiveness, impatience, and a high level of stress.

Type B

A personality type characterized by a more relaxed, less competitive, and less stress-prone behavior pattern compared to Type A.

Heart Disease

A broad term for a variety of diseases affecting the heart and blood vessels, such as coronary artery disease, heart failure, and arrhythmias.