NEW: Multifamily Lending Update
Lenders have been modifying their spreads/rates based on their “business model” on almost a daily basis as of late, here’s the latest news from the major multifamily lenders
Freddie Mac- A six- to nine-month DSR is required, regardless of due diligence.
· For a loan sized to a minimum 1.40x amortizing DCR or greater, irrespective of the actual interest-only period of the loan, the DSR amount will be six months amortizing debt service.
· For a loan sized to an amortizing DCR below 1.40x, irrespective of the actual interest-only period of the loan, the DSR amount will be sized to nine months of amortizing debt service.
Fannie Mae- Fannie is expected to announce similar requirements to Freddie Mac shortly
Fannie/Freddie Forbearance: Detailed Forbearance plans have also been released by both GSE’s. There are differences in the plans, the most significant being the requirement by Fannie Mae that all residual cash flow after normal operating expenses be sent to the lender/loan servicer during the forbearance period.
CMBS Market: Currently dysfunctional with no clear direction on how lenders will deal with loan modification request. Private label CMBS accounts for about 30% of CRE lending.
Life Insurance Companies – loaning conservatively and still open for business. A majority of firms have tightened their underwriting and lowered their leverage levels. Coupon range is currently resting at 3.5-4.5%.
FHA/HUD: Lending relatively unaffected, expected to increase volume during this crisis.
More to updates to come next week.