For revolving lines of credit in which a borrowing base sets the availability of funds, what loan amount and collateral value should be used to determine the LTV ratio?
The loan amount is the institution’s legally binding commitment (that is, the outstanding balance of the facility plus any availability under the borrowing base). Value is the lower of the borrower’s actual development or construction costs or the market value of completed units securing the loan multiplied by their percentage of completion.
Related Questions
- What are some common underwriting characteristics of revolving lines of credit in which a borrowing base sets the availability of funds?
- If Federal PLUS Loan funds create a FSA credit balance, may the funds be paid to the student instead of the parent borrower?
- Can my clients pledge funds from other fund companies as collateral for a Preferred Shareholder Credit Line or Loan?
