The Five Cs of Credit in the Apartment Building Mortgage Lending Business
“Loan underwriters often refer to the five Cs of credit when evaluating and underwriting loan applications. What are the five Cs and how do they affect mortgage lending on apartment properties? The five Cs are: capacity, capital, character, collateral and conditions. We will attempt to explain each of these items and their effect on apartment lending credit decisions.”
Source: The Five Cs of Credit in the Apartment Building Mortgage Lending Business
By Michael Stoler, Commercial Observer
(MARCH 28, 2014) The residential rental asset class is one of the most sought-after investments by purchasers of commercial real estate. Investors from around the world, including private equity funds, real estate investment trusts and established long-time owners of real estate, all want to own this asset class, especially if the property is located in New York City.
The purchasers and the owners of this property class have been fortunate that the majority of commercial and savings banks, as well as Fannie Mae, Freddie Mac and Wall Street firms providing CMBS financing, are all very interested in financing rental apartments.
via Multifamily Lenders Scramble For Business | Commercial Observer.
By Jessica Flur, Senior Editor
MULTI-HOUSING NEWS ONLINE
Washington, D.C.—Recently Senate Banking Committee Chairman Tim Johnson (D) and Ranking Member Mike Crapo (R) drafted the Federal Housing Administration Solvency Act of 2013. If passed, this bill would have a direct impact on Fannie Mae and Freddie Mac and calls for the creation of a new enterprise called the Federal Mortgage Insurance Corporation (FMIC).
MHN talks to Willy Walker, CEO of Walker & Dunlop, about this new proposed legislation and how the bill could affect multifamily if it passes.
via How Proposed Johnson/Crapo Legislation Could Affect Multifamily | Multi-Housing News Online.
[JANUARY 15, 2014] Demand is up across the board as borrowers seek to buy debt back from special servicers; recapitalize properties; access capital for tenant improvements; or perhaps reestablish business plans for properties, notes Josh Zegen, managing member and co-founder of Madison Realty Capital in New York City. In addition, there is a healthy supply of “transitional” deals getting done for acquisition, rehab and new construction. Borrowers for those types of transactions often utilize bridge and mezzanine capital as a source of financing as they work to stabilize properties and improve NOI before going out and seeking permanent loans.
via Bridge, Mezzanine Lenders See Rising Tide of Deals | Bridge & Mezzanine Finance content from National Real Estate Investor.
NEW YORK CITY-The phrase “a rising tide lifts all boats” applied generally to sales of significant commercial real estate in 2013, but it seems as though a variation on the old saw would be even more relevant. That is, a rising tide lifts the most rickety boats the highest, as Real Capital Analytics’ review of the year found there was an especially strong rebound for the property types and markets that had been the weakest in terms of recovery.
This rebound occurred amid a 19% year-over-year increase nationwide in commercial property sales worth $5 million or more. New York City-based RCA said the year’s tally reached $355.4 billion, while the Moody’s/RCA Commercial Property Price Indices were expected to post a 15% increase nationally Y-O-Y.
via RCA: Investment Sales Post 19% Y-O-Y gain – Daily News Article – GlobeSt.com.