Posted by Robert Kim on February 08, 2010 at 09:09:50:
In Reply to: Debt Yield posted by B. Hawkins on February 05, 2010 at 15:07:19:
I first heard this term used at a syndication event held by Dave Lindahl. Dave said that Debt Yield is a relatively new metric used to determine maximum loan amount, especially in uncertain markets. Is not as subjective as LTV since opinion of value is eliminated. FNMA uses this to determine maximum loan amount. When I asked how this is calculated with junior liens, he said that FNMA does not allow secondary financing so it is a moot point with them. Debt Yield lenders typically want 10% to 14% or higher as of the time of his event in September 2009.