For the Same Property as Above, Suppose the Underwriting Criteria

question 2

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 7% on the stated NOI. By this criterion what is the maximum loan amount?

• A) $80,000
• B) $8,000,000
• C) $11,177,084
• D) $11,428,571
• E) $14,285,714

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