| 1E - DSCR < 1.10; 1F - DSCR < 1.40 & < or = 75% U/W. Loan is secured by a 232-unit multifamily property in Modesto, CA, built in 2005. The 4/17/2008 inspection rated the Property in Good condition. YTD 6/30/2009 NCF DSCR is 0.78x with 84% Occ; YE 12/31/2008 NCF DSCR was 1.13x with 85.5% Occ. The Borrower began reporting a total unit count of 235, instead of 232 as U/W, at some point during 2008. DSCR decline is attributed to decreases in Occ and Rental income, combined with increased Monthly Debt Service. Based on Annualized figures, 1Q09 Base Rents declined $657,344 or 22.9% from U/W, and $347,134 or 13.6% from YE08; the resulting EGI is 13.6% below U/W and 12.4% under PYE. TOE increased 14.6% from U/W, however, U/W did not provide a detailed breakout of expenses, thus a complete line-by-line comparison to current figures cannot be made. Compared to PYE, no 1Q09 expenses are notably increased, resulting in TOE being 6.4% below PYE. The 1Q09 NCF is a 31.6% decline from U/W and 18.3% below YE08. However, DSCR variances are driven further down (31.6% below U/W and a 33.3% drop from PYE), due to the increased monthly Debt Service; the Loan was Interest Only until 12/31/2008, and began amortizing as of 1Q09; monthly loan payments have increased by approx $25K - $26K. Bank of America has requested Borrower\''s clarification regarding unit count increase, as well as feedback re: efforts to increase revenues to help offset the increased monthly debt service; awaiting a response.
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