The refinancing for the 42-year old complex was structured to be a 7-year interest-only loan and was funded to 59% of value. The funds came from Freddie Mac's Capped Arm program--a floating rate structure with a capped maximum note rate that is very competitive right now, Michael Lindgren, director with DBBM, tells GlobeSt.com.
Even if the terms were not competitive GSE financing is about the only game in town for multifamily borrowers. Not surprisingly financiers business with these entities have increased as a result; DBBM, for instance, has seen business with the GSEs increase year over year by 35%, Lindgren says.
"They have become just about the sole providers of liquidity in the multifamily sector," he explains. "taking market share away from life insurance companies and conduits, which have largely ceased to operate. Life insurance companies, though, are also competitive at lower LTVs."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
