Category Archives: Lending Environment

How Proposed Johnson/Crapo Legislation Could Affect Multifamily | Multi-Housing News Online

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.

Charting a Course Through a New Multifamily Lending Landscape | Multi-Housing News Online

By Summer Gell, Partner Engineering and Science Inc.

MULTI-HOUSING NEWS

(MARCH 21, 2014) Multifamily housing investors’ options for financing sources have been shifting lately, and Fannie Mae’s recent major revisions to the Multifamily Selling and Servicing Guide–which went into effect in February 2014–are adding another layer of complexity to the multifamily lending landscape.

Fannie Mae’s Guide revisions included underwriting standard changes in addition to significant changes to the third-party engineering due diligence required for multifamily mortgage loans, more specifically the policies for Physical Needs Assessments (PNA, also called a Property Condition Assessment by other lenders) and Seismic Risk Assessments (SRA) for properties in high risk seismic areas.

via Charting a Course Through a New Multifamily Lending Landscape | Multi-Housing News Online.

CRE Industry Faces Dramatic Changes in Multifamily Supply, Financing Environment – CoStar Group

The U.S. apartment market continued to see robust growth in 2013, but investors are keeping a wary eye on looming changes going into 2014, including the impact from rising supply, rising interest rates and the prospects of restructuring the nation’s two biggest government-sponsored enterprises (GSE’s) Fannie Mae and Freddie Mac.

via CRE Industry Faces Dramatic Changes in Multifamily Supply, Financing Environment – CoStar Group.

When supply increases; demand decreases. Buyers should remain sensitive to overpaying for multifamily properties in low cap markets, as the market continues to turn.

Fed Extends Stimulus as Growth Stumbles – NYTimes.com

By Binyamin Appelbaum – Originally published October 30,2013

WASHINGTON — The Federal Reserve is still waiting for clear evidence that the economy can grow decently without its help.

The Fed’s widely expected announcement on Wednesday that it would press ahead with its stimulus campaign of asset purchases and low interest rates reflected the reality that the nation’s central bankers gained little clarity in the six weeks since their last meeting, in part because the government shutdown delayed and distorted key economic indicators.

via Fed Extends Stimulus as Growth Stumbles – NYTimes.com.

REITs, Pension Plans Increase Multifamily Debt Holdings

BY JANN SWANSONREITs,  Sep 27 2013, 11:54AM

Commercial and multi-family mortgage debt increased by $24.5 billion in the second quarter of 2013, with $10.9 billion of that being debt in the multi-family sector.  The Mortgage Bankers Association MBA said the increase in debt from quarter to quarter was 1.0 percent for all mortgage debt and 1.3 percent for multi-family.  The aggregate outstanding commercial and multifamily debt at the end of the second quarter was $2.45 trillion; the multifamily portion was $875 billion.

via REITs, Pension Plans Increase Multifamily Debt Holdings.

Bond Purchases by Fed Will Continue, at Least for Another Month – NYTimes.com

As expected, the Fed’s policy-making committee voted to press ahead for now with its campaign to increase job creation. And its statement said nothing about how much longer it would continue to add $85 billion a month to its holdings of mortgage-backed securities and Treasury securities. But the Fed left its economic outlook basically unchanged, suggesting that the central bank still intended to reduce the volume of its purchases later this year.

via Bond Purchases by Fed Will Continue, at Least for Another Month – NYTimes.com.

No Further Room for Interest Rates to Go Down: CCIM – Quarterly Market Trends

low-interest-rates

There appears to be a small window of opportunity according to the latest Quarterly Market Trends report released by the CCIM Institute; but as all markets eventually change, so will interest rates. The time to act is now.

“As to interest rates, there is no further room to move down. The change will be in only one direction, and that’s up. The only question is, by how much and how fast? The Federal Reserve has publicly stated its desire to hold the short-term borrowing costs at essentially zero till 2015, or at least until the unemployment rate gets down to more desirable levels (to 6 percent and change). Low inflation is fortunately permitting the Fed to pursue ultra-loose monetary policy.”

http://www.ccim.com/sites/default/files/2013Q1-ccim-qmt.pdf

NAR Commercial Lending Survey: Are Lenders Asleep At The Switch? | The Source For NAR Commercial Real Estate

Economic recovery is here – but is it just for the biggest commercial real estate deals? Are lenders failing — again — to support our industry by extending credit only to heavy hitters and leaving the rest behind?

That’s the finding of NAR Commercial’s latest Commercial Lending Survey. Although commercial RE markets show signs of recovery, commercial lending standards have actually tightened in the past year for small businesses and “scuttled a major portion of contracted transactions for smaller properties”.

$2.5 Million Cutoff?

Lawrence Yun NAR chief economist, said there is a significant split in commercial lending depending on value. “This is very much a tale of two markets. There have been notable improvements in capital for large commercial transactions valued at $2.5 million or higher, but there remain significant challenges for small business,” he said.

Lack of credit hitting our deals hard

Yun continued: “Our Realtor members typically are involved in helping commercial clients with purchases under $2 million, where a lack of capital has caused two out of three respondents to report deals have fallen through. Given that most jobs are created through small business, the lack of capital is hurting small businesses and the overall economic recovery.”

via NAR Commercial Lending Survey: Are Lenders Asleep At The Switch? | The Source For NAR Commercial Real Estate.

Tight Lending Standards Hindering Commercial Real Estate Recovery | realtor.org

WASHINGTON May 3, 2012 – Although commercial real estate markets showed signs of recovery in 2011, commercial lending standards have tightened in the past year for small businesses and scuttled a major portion of contracted transactions for smaller properties, according to the National Association of Realtors® annual Commercial Real Estate 2012 Lending Survey.

via Tight Lending Standards Hindering Commercial Real Estate Recovery | realtor.org.