In looking through the instructions for item CCR465 of the TFR, I notice that the OTS has added language concerning calculation of the debt coverage ratio for multifamily loans. It now says:

"The debt service coverage ratio should be based on a fully indexed payment that will amortize the loan over its contractual term. It has long been industry practice to offer multifamily property loans with relatively short terms compared to the amortizing payment schedule. For example, the loan may have a 10-year term and a payment based on a 30-year amortization schedule with a balloon payment at the end of the term. In such cases, the DSCR should be based on the fully amortizing, fully indexed payment over the scheduled amortization period, but no longer than 30 years."

On one hand they seem to be saying amortize over the actual term but the last sentence sounds like you can use the amortization schedule, it just can't exceed 30 years.

I'm confused.