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Multifamily Lending Update Week of 10/12

Your Multifamily Lending Update by EM CAPTIAL LLC.

The National Multifamily Housing Council Rent Payment Tracker reveals 79.4% of apartment households made full or partial rent payments as of October 6th which is consistent with numbers from October 6, 2019.

Fannie: Fannie Mae recently announced a 5-basis point increase to their conventional indicative spreads and a 9 basis point decrease to their affordable indicative spreads for both Tier 2 and 3 deals above $6 million. Most deals continue to use fixed rate structures.

Freddie Mac: The transition to the secured overnight financing rate (SOFR) continues to be smooth and uneventful as about 40% of Freddie Mac loans opting for floating rate structures year to date. Freddie Mac has also signaled additional easing to underwriting certain cash-neutral refinances.

CMBS: Many issuers are looking to price before the election as they try to avoid potential uncertainty come 11/4. This will show the appetite that bond buyers have leading up to the election while introducing loan spread volatility. “All-in” coupons for conduit loans now sit in the low- to mid-3%, markets are nearly recovered from peak in the spring. Multifamily, self-storage and industrial remain the most desired property types.

Life Insurance Companies: Life companies are seeing sharp increases in volume. Many have begun to loosen their credit standards and underwrite pre-COVID leverage, and many multifamily business lenders are willing to entertain light bridge opportunities and new construction deals that are in mid-lease up

FHA/HUD: As mentioned, HUD struggled with processing as they had overwhelming demand as rates nearest record lows. HUD introduced the implementation of the “FHA Catalyst” which will speed up the loan process.

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