BETHESDA, MD-All-in rates for multifamily refinancing are the lowest in Walker & Dunlop broker Brendan Coleman’s memory. For a fully levered deal of 80%, a borrower could conceivably get a loan at 375 basis points. And indeed, Walker & Dunlop just secured $19.2 million in fixed-rate Fannie Mae financing for a portfolio of residential properties in Washington, DC, for William C. Smith + Co., at below 4%. “The debt on the company’s portfolio was maturing and they were able to refinance at a great time at significant savings,” Coleman says. Walker & Dunlop colleague Benjamin Krosin also worked on the transaction.

But capital market observers can’t help but wonder how long the low interest multifamily rates will last, despite the Federal Reserve Bank’s pledge to keep rates low. “There is definitely a perception that the low interest rates will be here for a long time but people are uncertain how long the execution will be here—how long Fannie and Freddie will be active and how long investor interest in these securities will hold,” Coleman says. In short, if one of these factors change, spreads could go up and the all-in rate could change considerably without the Treasury rate moving that much, he says.

For now, though, all is good. The Federal Reserve Bank has launched another round of quantitative easing, this time specifically buying GSE paper. It is focusing on single-family MBS but that supports the multifamily industry, Coleman says. “Because the Fed is buying all of the residential MBS it is pushing investors into other areas, including multifamily paper. That will help keep our rates down.”