| 1E - DSCR < 1.10, 1F DSCR <1.40 & <= 75% U/W. The loan is secured by an 81 unit multifamily property in Huntsville, TX built in 1973 and renovated in 2004. The property was inspected 10/31/2008 and rated in good condition. 1Q 3/31/2009 NCF DSCR is 0.92 with occupancy of 90%. YE 2008 DSCR was 0.74 with occupancy of 86%. The decline in DSCR is attributed to a decrease in rental income combined with an increase in operating expenses. The property experienced increased rollover throughout 2008, which caused a fluctuation in rental income when new tenants were signed with lower rental rates. In addition to the rental income decline the operating expenses, specifically payroll and R&M were higher than YE 2007. The increased expenses were a result of more repairs and make ready expenses to the units during the turnover. The increase in repairs correlates with the increase in maintenance payroll as the majority of the repairs are completed in house. Bank of America will continue to monitor the loan.
|
