Hotel/Motel Loan Underwriting Guidelines
Please incorporate the below minimum guidelines guidelines when you prepare and submit your proforma for underwriting approval:
| Rental Income: | Based upon prior 18 to 24 months income. Please furnish ADR and occupancy figures for same periods. | |
|---|---|---|
| (+) | Other Income: | Must be supported by historical collections |
| (-) | Vacancy: | Maximum of 75% occupancy |
| (-) | Management Fee: | Equal to the greater of the actual management fee or 5% |
| (-) | Franchise Fee: | Equal to the greater of the actual franchise fee or 5% |
| (-) | Marketing Expense: | Equal to the greater of actual marketing expense or 5% |
| (-) | Operating Expenses: | Should be supported by previous 2 years and current year-to-date expenses |
| (-) | Capital Reserves: | Minimum of 4% of total income, depending upon property age and condition |
| Equals | Net operating income |