Question 1

18-16.The process whereby a developer agrees to construct and donate a public facility is:

Accepted Answer

A)  impact fees 
B)  dollar based fees 
C)  cost recovery fee 
D)  exaction 
A)  impact fees 
B)  dollar based fees 
C)  cost recovery fee 
D)  exaction

Question 2

18-31.The city or county where the development is taking place may charge the developer ____________________to cover the cost of burden to the infrastructure.

Accepted Answer

A)  impact fees 
B)  carrying fees 
C)  community growth fees d all of the above 
A)  impact fees 
B)  carrying fees 
C)  community growth fees d all of the above

Question 3

Land loans will seldom exceed:

Accepted Answer

A)  70-80% of the appraised value of the land 
B)  80-90% of the appraised value of the land 
C)  60-70% of the appraised value of the land 
D)  50-60% of the appraised value of the land 
A)  70-80% of the appraised value of the land 
B)  80-90% of the appraised value of the land 
C)  60-70% of the appraised value of the land 
D)  50-60% of the appraised value of the land

Question 4

18-44.The holding of large parcels of properties in advance of the development process is referred to as:

Accepted Answer

A)  developing 
B)  warehousing 
C)  speculating 
D)  release provision 
A)  developing 
B)  warehousing 
C)  speculating 
D)  release provision

Question 5

18-37.Raw land is acquired by two types of investors:

Accepted Answer

A)  developer/warehouser 
B)  developer/speculator 
C)  speculator/warehouser 
D)  speculator/lender 
A)  developer/warehouser 
B)  developer/speculator 
C)  speculator/warehouser 
D)  speculator/lender

Question 6

18-38.Instead of buying land outright developers may prefer:

Accepted Answer

A)  to use subdivision trusts 
B)  to use partial releases 
C)  to use release patterns 
D)  to use options to purchase 
A)  to use subdivision trusts 
B)  to use partial releases 
C)  to use release patterns 
D)  to use options to purchase

Question 7

18-13.Subdivision control ordinances are designed to protect the:

Accepted Answer

A)  seller 
B)  lender 
C)  consumer 
D)  developer 
A)  seller 
B)  lender 
C)  consumer 
D)  developer

Question 8

18-48.When a lender requires a borrower to hire a specialist to explore the property,including its history of use and its current physical condition,this is referred to as:

Accepted Answer

A)  voucher control 
B)  inclusionary zoning 
C)  environmental audit 
D)  impact fee 
A)  voucher control 
B)  inclusionary zoning 
C)  environmental audit 
D)  impact fee

Question 9

18-35.Release provisions written into ADC loans are mainly for the protection of the:

Accepted Answer

A)  builder 
B)  developer 
C)  speculator 
D)  lender 
A)  builder 
B)  developer 
C)  speculator 
D)  lender

Question 10

Warehousing refers to:

Accepted Answer

A)  tying up as much equity as possible in large parcels of land 
B)  tying up as much equity as possible in small parcels of land 
C)  tying up as little equity as possible in large parcels of land 
D)  tying up as little equity as possible in small parcels of land 
A)  tying up as much equity as possible in large parcels of land 
B)  tying up as much equity as possible in small parcels of land 
C)  tying up as little equity as possible in large parcels of land 
D)  tying up as little equity as possible in small parcels of land

Question 11

18-15.Payments made to municipalities or other local governments by the developer are:

Accepted Answer

A)  impact fees 
B)  dollar based fees 
C)  cost recovery fee 
D)  exaction 
A)  impact fees 
B)  dollar based fees 
C)  cost recovery fee 
D)  exaction

Question 12

18-22.For an ADC loan the lender's yield can be determined by finding the rate which equates:

Accepted Answer

A)  the future value of the disbursements to the present value of the loan repayment 
B)  the present value of the disbursements to the present value of the loan repayment 
C)  the present value of the disbursements to the future value of the loan repayment 
D)  the future value of the disbursements to the future value of the loan repayment 
A)  the future value of the disbursements to the present value of the loan repayment 
B)  the present value of the disbursements to the present value of the loan repayment 
C)  the present value of the disbursements to the future value of the loan repayment 
D)  the future value of the disbursements to the future value of the loan repayment

Question 13

18-10.When the developer puts up only a portion of the sales price and agrees to pay the balance when the property is developed and sold it is a(n):

Accepted Answer

A)  exaction 
B)  density bonus 
C)  subordination 
D)  subdivision trust 
A)  exaction 
B)  density bonus 
C)  subordination 
D)  subdivision trust

Question 14

18-17.Construction loans:

Accepted Answer

A)  generally,are final type of financing prior to "takeout" loan 
B)  are generally short term 
C)  have interest payments that are variable and deferred and "financed" by the lender 
D)  all of the above 
A)  generally,are final type of financing prior to "takeout" loan 
B)  are generally short term 
C)  have interest payments that are variable and deferred and "financed" by the lender 
D)  all of the above

Question 15

18-39.The following has an affect on option premiums:

Accepted Answer

A)  length of the time of the option 
B)  volatility of market prices 
C)  the strike price of the option 
D)  all of the above 
E)  a and b 
A)  length of the time of the option 
B)  volatility of market prices 
C)  the strike price of the option 
D)  all of the above 
E)  a and b

Question 16

18-12.In the event of a default,the development lender will have the rights to:

Accepted Answer

A)  dollar based fees 
B)  impact fees 
C)  work materials of developer 
D)  recovery fee 
A)  dollar based fees 
B)  impact fees 
C)  work materials of developer 
D)  recovery fee

Question 17

When a construction loan is made and the seller's note has been subordinated:

Accepted Answer

A)  the construction lender will have a junior position in the case of default 
B)  the seller will have a junior position in the case of default 
C)  the construction lender will have a senior position in the case of default 
D)  both b and c 
A)  the construction lender will have a junior position in the case of default 
B)  the seller will have a junior position in the case of default 
C)  the construction lender will have a senior position in the case of default 
D)  both b and c

Question 18

A large proportion of the covenants and restrictions contained in loans to finance ADC of commercial properties are directed at the:

Accepted Answer

A)  lender 
B)  seller 
C)  agency problems d developer 
A)  lender 
B)  seller 
C)  agency problems d developer

Question 19

18-30.A rolling option would most likely be used by a:

Accepted Answer

A)  speculator 
B)  construction company 
C)  developer 
D)  all of the above 
A)  speculator 
B)  construction company 
C)  developer 
D)  all of the above

Question 20

Land loans are considered to be:

Accepted Answer

A)  risky 
B)  tax beneficial 
C)  non-risky 
D)  none of the above 
A)  risky 
B)  tax beneficial 
C)  non-risky 
D)  none of the above

Exam 18: Acquisition, Development, and Construction Financing

18-16.The process whereby a developer agrees to construct and donate a public facility is:

18-31.The city or county where the development is taking place may charge the developer ____________________to cover the cost of burden to the infrastructure.

Land loans will seldom exceed:

18-44.The holding of large parcels of properties in advance of the development process is referred to as:

18-37.Raw land is acquired by two types of investors:

18-38.Instead of buying land outright developers may prefer:

18-13.Subdivision control ordinances are designed to protect the:

18-48.When a lender requires a borrower to hire a specialist to explore the property,including its history of use and its current physical condition,this is referred to as:

18-35.Release provisions written into ADC loans are mainly for the protection of the:

Warehousing refers to:

18-15.Payments made to municipalities or other local governments by the developer are:

18-22.For an ADC loan the lender's yield can be determined by finding the rate which equates:

18-10.When the developer puts up only a portion of the sales price and agrees to pay the balance when the property is developed and sold it is a(n):

18-17.Construction loans:

18-39.The following has an affect on option premiums:

18-12.In the event of a default,the development lender will have the rights to:

When a construction loan is made and the seller's note has been subordinated:

A large proportion of the covenants and restrictions contained in loans to finance ADC of commercial properties are directed at the:

18-30.A rolling option would most likely be used by a:

Land loans are considered to be:

Finance and Real Estate

Money Credit and the Determination of Interest Rates

Finance Theory and Real Estate

The Early History of Residential Finance and Creation of the Fixed Rate Mortgage

Modern Residential Finance

Alternative Mortgage Instruments

Financing and Property Values

Federal Housing Policies: Part 1

Federal Housing Policies: Part 2

The Secondary Mortgage Market

Valuation of Mortgage Securities

Controlling Default Risk Through Borrower Qualification Loan Underwriting and Contractual Relationships

Loan Origination, Processing, and Closing

Mortgage Default Insurance, Foreclosure, Title Insurance

Value, Leverage, and Capital Structure

Federal Taxation and Real Estate Finance

Sources of Funds for Commercial Real Estate Properties

Permanent Financing of Commercial Real Estate Properties

Ownership Structures for Financing and Holding Real Estate

Real Estate in a Portfolio Context

Liability, Agency Problems, Fraud, and Ethics in Real Estate Finance

Filters