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  • #422

    A.CRE
    Participant

    How is construction interest calculated?

  • #423
    mm
    Spencer Burton
    Keymaster

    The construction interest is modeled on the Dev-Interest Calc tab (show that tab by setting F43 on the Summary tab to ‘Show’). Interest is calculated as the Construction Interest Rate (Sources and Uses C15) divided by 12 (to arrive at a monthly interest rate) times the construction loan balance in each month (row 21) plus any accrued interest. This calculation is a circular reference, hence the ‘Set Construction Loan Amount’ macro on the Sources and Uses tab which iterates the calculation to arrive at an interest reserve and total construction loan amount.

  • #777

    Dan Whitaker
    Participant

    Follow up question: How do I reduce the interest reserve number by the amount of available operating cash flow that could be used to pay it before full stabilization and a take-out loan is arranged? This causes the interest reserve to be too high. Am i missing something?

    Dan

    PS: I realize I’m posting this question on a couple of threads. Sorry for any inconvenience.

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