Multifamily Mortgage

Multifamily mortgages have faired relatively well compared to other commercial mortgages in the current credit crisis. The reason is the historical stability of this asset class. Borrowers can still expect some of the highest levels of funding, the longest amortization schedule and the lowest fixed rates throughout the business enterprise today.

As fair as loan securities, multifamily mortgage loans are still going up 80% on purchases and 75% LTV on refinances. Compare that to all other investment property loans which are now limited to 60 - 65% of loan value. The main reason for this high level of debt is the support of government through Freddie Mac and Fannie Mae. These institutions buy the apartment debt from banks and lenders that finance them - so that the increased risk because of high debt levels increased on the government and not carried by the financing banks.

Multifamily Mortgage

Most traditional commercial bank financing is capped at 20 year amortization schedules, types of multifamily buildings elsewhere. It is common to get 30 years and the funding of some programs go to 35 and even 40 years on multifamily mortgages . These depreciation tables and reduces monthly payments, which have an interesting impact on the ratio of debt coverage, increasing the amount of debt the property can support. Multifamily mortgage debt ratios of coverage are normally set at 1.2 relatively low. Some banks have raised this at 1.25 the credit crisis, but compared to the 1.3 that many types of property is yet to receive this aggressive.

Interest rates have been very unpredictable over the past year. margins have increased from as low as 150 basis points before the credit crisis to 350 in cash. Things seem to have stabilized more information on this subject and we are now witnessing the most rates in excess of 5% to 6% at the bottom of the loans between family most multi $ 400,000 - $ 5,000,000.

Overall, underwriting standards were strengthened in the multifamily arena, but it remains one of the most liquid of the company. Knowing that banks and lenders are still active in the financing of loan applications and offer the lowest rates and best conditions remains the key in the market.