| 1E - DSCR < 1.10 and 1F - DSCR < 1.40 and <= 75% U/W DSCR. The loan is secured by a 91 unit multifamily property in Nacogdoches, TX built in 1965. The property was inspected on 03/16/2009; rated in Fair condition. Q1-2009 NCF DSCR is -.20 with an occ of 86%; YE 2008 NCF DSCR was .49 with an occ of 74%. Decline in NCF is a result of an EGI decline. Ann 2009 EGI shows a 14% drop from YE 2008 and a 18% drop from U/W. The EGI decline is due to Gross Potential rents are less than U/W Gross Potential rents combined with higher rental concessions and increased vacancy loss expenses. Per Bwr, occupancy decline is a result of students moving out at end of Dec, and although occupancy declines are always seen at semester end, during Dec 08 the number of move outs was higher than normal or anticipated as per Bwr. Bwr noted that bad debt was a factor for the slight EGI decline due to Bwr writing off bad debt or sending to a collection agency. Asking rates are at market or slightly above (Bwr did not provide asking rates). Rental concessions are normally not offered; however, during 2008 concessions were offered as per Bwr but types of concessions were not provided. Occupancy as of late 05/09 was 85%. Property is adv/mkt in local newspapers, company website, and at Stephen F. Austin Univ (property is primarily made up students from this University) Bank of America will continue to monitor the loan.
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