Appendix A - Appendix A to Part 628—Loan-to-Value Limits for High Volatility Commercial Real Estate Exposures
Table A sets forth the loan-to-value limits specified in paragraph (2)(iv)(A) of the definition of high volatility commercial real estate exposure in § 628.2.
Table A—Loan-to-Value Limits for High Volatility Commercial Real Estate Exposures
| Loan category | Loan-to-value limit
(percent) | Raw Land | 65 | Land development | 75 | Construction: | Commercial, multifamily, 1 and other non-residential | 80 | 1- to 4-family residential | 85 | Improved property | 85 | Owner-occupied 1- to 4-family and home equity | 2 85 |
|---|
1 Multifamily construction includes condominiums and cooperatives.
2 If a loan is covered by private mortgage insurance, the loan-to-value (LTV) may exceed 85 percent to the extent that the loan amount in excess of 85 percent is covered by the insurance. If a loan is guaranteed by Federal, State, or other governmental agencies, the LTV limit is 97 percent.
The loan-to-value limits should be applied to the underlying property that collateralizes the loan. For loans that fund multiple phases of the same real estate project (e.g., a loan for both land development and construction of an office building), the appropriate loan-to-value limit is the limit applicable to the final phase of the project funded by the loan; however, loan disbursements should not exceed actual development or construction outlays. In situations where a loan is fully cross-collateralized by two or more properties or is secured by a collateral pool of two or more properties, the appropriate maximum loan amount under loan-to-value limits is the sum of the value of each property, less senior liens, multiplied by the appropriate loan-to-value limit for each property. To ensure that collateral margins remain within the limits, System institutions should redetermine conformity whenever collateral substitutions are made to the collateral pool.