Your Multifamily Lending Update by EM CAPTIAL LLC.
UPDATE – A new RealPage analytics report revealed that US apartment rent prices lowered for the first time in a decade. The winner: Midwest rents which saw a slight increase at .8% YoY.
Fannie/Freddie: Fannie Mae and Freddie Mac reported strong loan fundings of $6.8 billion and $6.4 billion respectively in May. Fannie & Freddie Mae are maintaining flexibility with reserves and offering lower leverage deals.
Fannie: Pricing remains competitive as demand increases for Fannie Mae MBS.
Freddie: Freddie recently reduced prices by 10 basis points for TAH deals and 5 basis points for conventional fixed and floating rate products.
CMBS: Many of the major conduit originators are quoting new loans at more conservative leverage levels with coupons in the high 300s bps. with leverage of 65% LTV.
AAA spreads have stayed calm in the secondary market while the BBB spreads have dropped about 25 basis points. Many of the major players are staying conservative but actively quoting new deals. Coupons in the high 300s basis point range.
Life Insurance Companies: Life Companies are getting bullish as multifamily rent collections come in higher than expected while forbearance requests drop significantly.
Lenders are now offering leverage levels around 65% though pricing has tightened as lenders are competing for higher quality deals. Now shorter-term rates for sub 50% LTV’s can be seen below 3%. 10-year rates are pricing between 3.25-3.50%.
FHA/HUD: Volatility and Delays.
Rates are beginning to show some more volatility given the recent move in the 10-year treasury yield. As previously mentioned HUD is experiencing delays given the recent surge in demand, but may vary region to region.