Question

5. Which statement is true about permanent loans for income producing properties?

1. They often have prepayment penalties
2. They usually include some amortization of the principal amount during the loan term
3. They require a debt service coverage ratio higher than 1:1 relative to the net operating income
4. All of the above

6. Why does a construction loan have more risk to the lender than a permanent loan?

1. The property is not generating cash flows to service the debt
2. Uncertainty about what the demand for the property will be upon completion of construction
3. Uncertainty about when the property will be completed due to a whole host of issues
4. All of the above

Answer 1

the answer to the first question is-

D) all of the above

the answer to the second question-

D) all of the above