For Real Estate Professionals Seeking a Market Edge
Mortgage Financing is Still Available
As 2009 continues to wind down, borrowers remain confused on the present state of the commercial/multi-family lending market. Across the board, overall lending production is down dramatically; due primarily to lenders who have exited the market; more stringent underwriting policies; fewer sale transactions; and properties that are overleveraged. Those transactions for which lenders are providing financing are completed based upon more conservative values and underwriting standards. Banks, credit unions, and insurance companies are leading the way in financing acquisition and permanent loans. These loans are typically 65% loan to value or less, underwritten using a stress capitalization rate of 8% to 9%, and with a debt coverage ratio of at least 1.25'.
The bulk of the multi-family financing that is transacted is done so through agency lenders such as Fannie Mae, Freddie Mac, and HUD. Some regional banks and thrifts are also financing the less stabilized multi-family assets. Commercial loans are still being funded by credit unions, local and regional banks. Life insurance companies are also funding the larger stabilized commercial properties albeit at more conservative levels than most banks.
The good news is that there is money is available for loans that fit today's underwriting practices
We will keep you posted…
Hot Money
Permanent Loans for California Properties
Penstar recently identified an insurance company actively financing acquisition/refinance loans for properties throughout California. The lender is seeking to fund loans from $1 million to $7 million with a maximum 30-year amortization. Preferred properties are medical office buildings, industrial, anchored retail, and apartments. Loan terms and corresponding fixed interest rates as of August 27th are as follows:
| Loan Term (Years) | Intrest Rate (Range) |
|---|---|
3 |
6.00-6.50% |
5 |
6.50-7.00% |
7 |
6.75-7.50% |
10 |
7.00-7.75% |
To learn more, please contact Steven Hamermesh at (818) 883-9609 or Hamer@PenstarAdvisors.com..
Helpful Humor
The best antidote for those challenging transactions is to take a moment to have a hearty laugh. Helpful humor is our way of infusing laughter into your work-week
“I Wouldn't Be Eating Here” We noticed a large sign at the counter that announced, “No bills larger than $20.00 will be accepted.” Pointing to the sign, my friend exclaimed, “Believe me, if I HAD a bill larger than $20.00, I wouldn't be eating here!” |
30
Day Libor |
10-Year
Treasury |
Prime |
0.32% |
3.74% |
3.25% |
Penstar Realty Advisors can be reached at (818) 883-8600.
Our offices located at:
21700 Oxnard Street, Suite 1870, Woodland Hills, CA 91367