The overall tone from lenders remains the same from the last conference we attended in February, cautious optimism. The prediction from a consensus of lenders is we are in the seventh inning of the cycle and have close to two years left to run.
- CMBS spreads are anticipated to widen in the next month due to the supply of loans for securitization and less demand.
- While lending for Life companies has remained at status quo we found it interesting that a few life company lenders were pulling back on their year-end allocation in anticipation of a market shift.
- There has been a recent shift in Agency business. Given that agencies are managing their business to meet their goals, you may start to see a greater push for Freddie Mac uncapped (green, affordable, etc.) and Fannie Mae capped (market rate, non-green, etc.) business.
Links to this month’s rates: Multifamily Mortgage Indexes – September COMMERCIAL MORTGAGE RATES – September
|CommCap is the largest full-service mortgage banking company in Nevada, with offices in Reno and Las Vegas. We specialize in originating, underwriting, closing and servicing loans in excess of $1MM on all income-producing property types. We represent a wide variety of funding sources including Life Insurance Companies, Investment Banks (CMBS), Bridge Lenders, Agency lenders and Banks.
|Agency Update(multifamily, mobile home parks, student housing, senior housing, affordable housing, etc.)
||Life Company Update(multifamily, office, retail, self-storage, industrial, etc.)
||CMBS Update(multifamily, office, retail, self-storage, industrial, etc.)
- Fannie and Freddie Mac have a small balance program for deals $1MM- $6MM
- Green Rewards provides up to 5% more proceeds than conventional and you will see a cost savings in spread
- Mod-Rehab Products are offered by both Fannie and Freddie
- HUD/FHA offer 35-yr. terms with 35-yr. amortization. Something to consider for people who plan to hold properties long-term
- HUD offers construction-perm financing. Up to 85% LTC, non-recourse with rates similar to conventional. 40-yr., term/ 40-yr. am. This is for the long-term hold
- 5, 7, 10, 12, 15 and fully amortizing terms available
- Our recourse based life companies will go as low as $1 million in proceeds compared to a minimum of $3 million for non-recourse life company lenders
- Non-recourse and Recourse (for less conservative loan requests) available
- Recourse is different from traditional recourse in that there is no mark-to-market language in the loan documents, hence there is no margin call. It does not go on your credit report
- 65%-75% max LTV (non-recourse and recourse)
- 3, 5, 7, 10-yr.… up to fully amortizing terms available
- CMBS offers interest only depending on the leverage point
- 75% max LTV (most CMBS lenders are underwriting max 70% LTV based B-buyer demand)
- 5, 7, 10-yr. terms available
- Still the most aggressive lender for retail and office properties
- Rate lock at application is available with no “material adverse change” language. There is a slight premium to the spread for the rate lock