Apartment Building Financing Outlook for 2014

Apartment building investment loans in 2014,  thoughts and predictions on what’s in store from lenders large and small and the organizations who represent them:

Greystone via MultiHousingNews: We do think there will be more capital available,” says Bob Barolak, co-COO at Greystone. Lenders will become even more eager to make loans in the multifamily space, he says, because of greater confidence in the economy and markets.

Another major reason for an expected bump in capital available in the next 12 months is that CMBS financing has come back into the multifamily sector—from a volume of practically zero in 2012. They will continue to increase market share significantly in 2014.” Currently, CMBS multifamily financings are carrying interest rates of about 5.10 to 5.20 percent, or about 10 to 15 basis points lower than rates in Fannie Mae transactions, according to Barolak.

Maximum LTVs on CMBS loans—up to 75 percent on 10-year terms for multifamily properties—have also become competitive with those of Fannie and Freddie loans. Moreover, CMBS lenders can become “extremely aggressive” for deals they want to acquire to round up a securitization pool, Barolak says. In such instances, “they can dramatically lower the interest rate significantly below what Fannie and Freddie will offer.”

Life insurance companies are another Continue reading Apartment Building Financing Outlook for 2014

MBA: GSEs vital in Ensuring Liquidity and Stability in apartment building investment finance.

The Mortgage Bankers Association is out today with a white paper “Ensuring Liquidity And Stability: The Future Of Multifamily Housing Finance And The Government-Sponsored Enterprises“. (or see the MHN exec sum here) The paper highlights the role of the GSEs (Government Sponsored Enterprises, i.e. FNMA ‘Fannie Mae’ and FHLMC ‘Freddie Mac’) in today’s multifamily finance market and presents five recommendations for the future making their points with a set of charts that demonstrate the size of their role in multifamily as well as the very low amount of bad loans they’ve made in the sector.

  • Our nation’s housing policies should reflect the importance of multifamily rental housing, the range of capital sources that support this market, and the need for liquidity and stability in all market cycles.

Apartment occupancy has been growing while single family has been falling

GSE lending has been the largest part of meeting multifamily financing needs Continue reading MBA: GSEs vital in Ensuring Liquidity and Stability in apartment building investment finance.