The new program, designed to provide what the companies call "access to the most competitively priced capital offered by Fannie Mae," will provide locally based MMCC access to ARCS Fannie Mae processing and underwriting while furnishing ARCS with access to the huge flow of deals generated by the Marcus & Millichap brokerage operation, says William Hughes, managing director of MMCC. The program is being rolled out after joint training of underwriting and support staffs at MMCC and ARCS.

Hughes tells GlobeSt.com that the program will make the most sense for loans of $3 million and larger. Although MMCC and ARCS both have extensive experience with Fannie Mae financing, he says, this will be the first time the two companies have collaborated on such a program.

"We have 750-plus agents generating transactions, and ARCS wants access to those," Hughes says. "From our perspective, we want to work with someone we feel confident can deliver this product on a consistent basis and who can ensure that we are getting the lowest cost funds available." Hughes points out that ARCS was Fannie Mae's No. 1 Delegated Underwriting and Servicing (DUS) multifamily loan originator and its No. 3 affordable housing lender in 2003.

Howard Levine, president and CEO of ARCS, says the new program will provide "a unique distribution channel for our products" because of the partnership with MMCC. Beside market-rate apartments, the MMCC-ARCS alliance will offer access to Fannie Mae loans for co-ops, affordable housing, smaller properties, student housing, seniors housing and manufactured housing communities.

Closing costs for the loans will be variable; Hughes estimates processing costs will range from $12,000 to $18,000 for the loan packages, which will include a third-party appraisal, an environmental report, and a physical site inspection.

Hughes tells GlobeSt.com that the new program is being launched into a lending environment where the performance of commercial real estate, including multifamily properties, has attracted an abundance of capital that shows no signs of slowing.

His recent attendance at the Mortgage Bankers Association conference on commercial lending and his meetings with Marcus & Millichap managers have shown, Hughes says, that in the commercial lending universe, "Everyone is intending to increase their production." At the same time, the MMCC executive notes, so many of the potential discretionary refinancings have already been completed in the past few years that there will be, theoretically at least, less property available to finance. That combination of factors means that lenders will need to be more efficient than ever, he says, one reason for programs like the alliance between MMCC and ARCS.

MMCC is a subsidiary of Encino, CA-based Marcus & Millichap Real Estate Investment Brokerage Co. MMCC last year sourced more than $600 million of commercial real estate financing. ARCS services a portfolio exceeding $11 billion and representing more than 1,700 loans secured by properties in nearly 40 states.