Definitions applicable to qualifying commercial real estate loans.

CFR · 2024-01-01 · US · Title 12

The following definitions apply for purposes of §§ 1234.15 and 1234.17 : (1) For acquisition funding, the lesser of the purchase price or the estimated market value of the real property based on an appraisal that meets the requirements set forth in § 1234.17(a)(2)(ii); or (2) For refinancing, the estimated market value of the real property based on an appraisal that meets the requirements set forth in § 1234.17(a)(2)(ii). (1) A loan secured by a property with five or more single family units, or by nonfarm nonresidential real property, the primary source (50 percent or more) of repayment for which is expected to be: (i) The proceeds of the sale, refinancing, or permanent financing of the property; or (ii) Rental income associated with the property; (2) Loans secured by improved land if the obligor owns the fee interest in the land and the land is leased to a third party who owns all improvements on the land, and the improvements are nonresidential or residential with five or more single family units; and (3) Does not include: (i) A land development and construction loan (including 1- to 4-family residential or commercial construction loans); (ii) Any other land loan; or (iii) An unsecured loan to a developer. (1) The annual NOI less the annual replacement reserve of the CRE property at the time of origination of the CRE loan(s); to (2) The sum of the borrower's annual payments for principal and interest (calculated at the fully indexed rate) on any debt obligation. (1) For ac

official document · source cfr-2024 · id 12:§ 1234.14