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The coming year is looking to be an eventful period for mortgages and financial lending in real estate. Debt markets are poised to undergo significant changes over the following years amidst regulatory changes and geo-political headwinds. Investors, both seasoned and novice, should be aware of the changes and the effects they could have on current and future mortgages.
Livingston Hessam, Vice President of financial solutions firm Walker & Dunlop and financing expert, discusses these changes in the debt markets and what investors need to know about their impacts on mortgages and other debt-equity options.
- 2016 Mortgage Bankers Association Conference
- Annual conference gauges financing market for coming year
- Mixed outlook for 2016
- Multi-family holds strongest appetite for lenders
- Debt Categories
- Agency Debt – Fannie Mae / Freddie Mac
- Conventional rates, senior housing, student housing, manufactured housing
- High-leverage, non-recourse, cap limits
- Reached 2015 cap before end of year
- Introducing smaller deal offerings ($1-5 million) – lower upfront closing costs, for typically novice borrowers, not included in annual cap limit, do not require same level of eligibility requirements
- Only can acquired through authorized servicers/lenders
- CMBS Markets (Commercial Mortgage-Backed Securities) – Loans sold by banks into secondary markets
- Amid current CMBS 10 year maturity loans wave
- Several regulations coming into effect causing uncertainty: Risk Retention (Dec. 2016) – Req. CMBS issuers to hold 5% of loan to securitize deal
- Investors and lenders advised to close deals in first half of year
- Life-Insurance Company Loans
- Typical deal – sub-70% leverage, non-recourse, strong exp. sponsor, well stabilized market
- Positive lending outlook for 2016
- Conventional Lending (Banks)
- Regulatory changes: Dodd-Frank Act
- Alt. Lending
- Walker & Dunlop offers bridge-lending packages
- Good for investors with assets not ready for perm. agency lending
- Up to 80% of cost for pre-stabilized deal or value-add deal, up to 36 months, help re-sell or re-finance
- For multi-family, student housing, manufactured housing, independent & assisted living, and skilled nursing
- Agency Debt – Fannie Mae / Freddie Mac
Livingston kindly provided us with a detailed, corporate overview package for Walker & Dunlop, further describing the financial solutions they offer as well as contact information.