commercial property, prices recovered to mid-2003 Levels CoStar 2012 News APARTMENT LOAN RATES LINK

APARTMENT LOAN RATES LINK
Despite a generally flat March for pricing of commercial property, prices recovered to mid-2003 levels in the first quarter as improving fundamentals and liquidity causing a broadening of the recovery into non-core commercial real estate and secondary markets, according to this month's CoStar Commercial Repeat Sale Indices (CCRSI) report. 

At this rate it will be 2006 in ten short years. Oprah sells her Chicago condo for about 1/2 of what she paid. say $3,000,000 on $6,000,000 cost plus extra shoe closets.

Apartment Loans Nationally $2,000,000 and up Small Apartment loans Chicago FNMA FHA and Community Banks

Apartment Loans Nationally $2,000,000 and up
Small Apartment loans  Chicago
FNMA FHA and Community Banks

RATES 

FHA 223(f) Rates 4.50% 35 years

FHA 223(f) Loans Rates 4.5% due to the AAA rating of the GNMA securities Loan amount $2,500,000 and up

This program offers the best rate available for apartment loans and allows for refinancing of debt up to 83.33% and cash out loans up to 75% of value. The process takes about five or six months depending on FHA office and cost a little more than FNMA and Freddie Mac for the reports and FHA exam fee ($3 per $1,000).

The borrower must also hold excess cash flow in an account and only withdraw excess cash flow every 6 months.  Annual Audits of income and expenses and balance sheets are also required.

The interest rates and term (35 years) are the main draw.  With FNMA and Freddie Mac Multifamily operations under Government control and their parent company destined for closure, FHA GNMA MBS securities have become the highest rated mortgage backed securities with the lowest rates.  

This program is not for everyone but for large apartment loans you currently save one or more percent over FNMA or Freddie Mac 10 year loans.

FHA 221(d(4 New Construction

FHA 221(d)4 New construction loans are being funded by FHA but the total amount of new construction funding is much smaller than the 223(f) refinance funding.  Rates at about 1.25 percent higher than 223(f) rates which are about 5% currently.

The cost of qualifying for a FHA new construction loan  exceeds most other financing programs since the developer must pay for working drawings, about $30,000 in lender required reports and an FHA exam fee of $3 per $1,000 of mortgage request.  The contractor must be able to bond a fixed construction price using Davis Bacon Prevailing local wages.        

The typical FHA borrower that use the FHA 221(d)4 program ofter is a repeat client and the transactions are normally in excess of $5,000,000 due to the costs of preparing for closing of the loan.

FHA allows a maximum loan of 83.33% of cost for market rate properties and slightly higher for affordable rental housing.  They also require an operating deficit fund and a 4% working capital letter of credit or cash deposit. Basically the equity requirement even after net out BSPRA (Deferred Developer Profit) equals or exceeds 20% at this time.

FHA Apartment Loan Rates

FHA 223(f) GNMA rates have been around 5% plus MIP for apartment refinance and purchase loans.

FHA 221(d)(4) GNMA rates have been just below 6% plus MIP for apartment construction and rehab loans.

FHA 223(f) Apartment Loans New Construction Takeouts

FHA is offering waivers for the three year rule for properties that have a Certificate of Occupancy (Co) prior to the date of loan application. This allow us to use the FHA 223(f) program to finance up to 85% of the value of the property if there is no cash out and 80% of the value in cash out transactions.

See:http://www.kendallrealtyadvisors.com/FHA223F.html

FHA Apartment Loan Rate

The treasury auction flops rates on 10 year treasury jump 15 basis points.

Rates are going up.