Commercial Loans & Mortgage News - July 24, 2001
It's An "All You Can Eat Buffet" for Apartment Owners Seeking Financing
- by Louis Weisman
President, American Property Financing West LLC
At the end of the second quarter of 2001, both FannieMae and FreddieMac were well on their way to exceeding the new production budgets established earlier in the year. In fact, in some regions these annual budgets have already been exceeded. This is an incredible achievement given that the total budget for both entities in 2001 exceeds $20 billion in total funding! However, the ultimate beneficiaries of this massive volume of mortgage production are the owners of multifamily properties.
2001 has been characterized by historically favorable rates. Rates for 75% - 80% LTV deals have ranged from a very attractive 6.75% to 7.25% for most of the year. Currently, prevailing rates on the FannieMae DUS product line have fallen below 7.0% for the second time this year. By historical standards, these are exceptional opportunities for existing owners who wish to refinance or for purchasers who are seeking competitive acquisition loans.
FreddieMac continues to aggressively seek newer, recently completed projects and lower LTV transactions. Spreads as low as 185 basis points over the 10-year Treasury have been structured for 20-year term deals that rate below 65% LTV. FreddieMac features a variety of creative deal making structures that can be tailored to individual transactions both large and small.
With the recent reductions in short-term rates, both investors have re-focused their efforts in providing attractive variable rate transactions. These are designed to allow the current benefits of a variable rate floater over LIBOR and a subsequent conversion to a fixed rate. Current spreads for variable rate loans range from 185 to 200 over the 3-month LIBOR with all-in rates between 5.60% and 5.75%.
Both offer a value-based pricing matrix, which allows more conservatively structured loans to receive more aggressive pricing and terms. Additionally, we can provide supplemental loans to increase leverage during the term of the original mortgage. Typically, these loans can be funded 24 months after the initial funding. Other programs include forward commitments for new construction and credit enhancement for tax-exempt bond transactions.
The consensus at American Property Financing (APF) is that favorable lending conditions will prevail for the remainder of the year and, with a corporate production goal of $1.5 billion, we remain committed to providing mortgage capital under these programs.
APF funds multifamily loans, portfolios, and tax-exempt credit enhancements from $3 to $150 million nationally under the programs offered by the FannieMae DUS program and FreddieMac's "Program Plus". We use correspondents like Steelhead Capital to originate business for us and to ensure the borrowers' needs are addressed throughout the entire transaction. On behalf of both Steelhead Capital and APF, we look forward to working with you on your upcoming financing requirements
American Property Financing West LLC is a wholly owned subsidiary of the American Property Financing Inc. APF is a "top 5" volume producer for the FannieMae DUS program, a FreddieMac "Program Plus" lender and an approved MAP lender for FHA/HUD multifamily properties. APF lends nationwide on a wide variety of market rate and affordable rental properties.
Previous Newsletter | Return to Index
Chief Executive Officer Peter Slaugh founded Steelhead in 1999. In the relatively short period since its inception, Slaugh has built Steelhead into a leading resource for debt and equity placement nationwide. Slaugh is primarily engaged in growing the company and its lender relationships, as well as working on financings.
San Francisco Offices
With an extensive lender network, Steelhead Capital has built its reputation on structuring commercial loans requiring both debt and equity placement. Fluctuations in the capital markets present significant challenges for investors and we are pleased to provide financing as well as guide and advise clients through the process. Whether you are looking for apartment financing, commercial financing, mezzanine financing, or creative "out of the box" real estate loan alternatives, we can help.
For apartment loans below $2 million, we have a small apartment loan program with extremely competitive rates. For apartment loans and commercial mortgage loans above $2 million, we provide direct access to the country's most aggressive lenders. Make Steelhead Capital a part of your commercial real estate financing success. We look forward to hearing from you soon.
Please click here for your confidential and complimentary loan review. Are there more questions that you'd like answered? Contact us online, or call our executive team directly in our new San Francisco office at 888-951-6600.
Subscribe to Commercial Loans & Mortgage Newsletter
© 2004 All rights reserved.
