Real Estate Math

A Vermont lender requires a debt coverage ratio (DCR) of at least 1.25 on a commercial loan. The annual NOI is $75,000. What is the maximum annual debt service that would be approved?

A$52,000

B$60,000✓ Correct

C$65,000

D$93,750

Explanation

DCR = NOI / Annual Debt Service. 1.

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