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When should institutions calculate the LTV ratio for residential tract development loans?

April 26, 2017CALCULATE Development Institutions Loans LTV ratio Residential tract

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When should institutions calculate the LTV ratio for residential tract development loans?

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An institution should calculate the LTV ratio at the time of loan origination and re-calculate the ratio whenever collateral is released or substituted. If the LTV ratio is in excess of the supervisory LTV limits, the institution should comply with the lending guidelines for high LTV loans.