Apartment Lenders, Commercial Lender 

Apartment lenders are generally broken down into four main categories, though each can overlap in terms of how they fund and hold onto debt long term.  For example, it's common that a traditional bank will fund an apartment loan, than turn around and sell the debt to Fannie Mae or Freddie Mac, like a pure apartment lender would.   

Apartment Lenders - Life Insurance Companies

Life insurance companies provide some very interesting apartment lendingoptions, for very strong loan requests.  The typical parameters are loans over $30 million though some will go down to as low as $10 million.  Underwriting is very conservative and with a typical cap at 60% loan to value and debt coverage ratios will rarely go below a 1.20. 

Another interesting component of this type of apartment lender, is that they portfolio their mortgage debt, ie they hold onto the loan long term on their own balance sheet.  As the rest of the mortgage industry watches the secondary market fall apart, many portfolio lenders are enjoying unprecedented growth.  If you have a large, stable project, whether apartment or any other type of investment property this maybe your best option.  We have access to the life insurance companies that are actively funding.    

Commercial Lender - Conduits

Conduit loans, Commercial Mortgage Back Securities loans (CMBS), Commercial Debt Obligations (CDO's) are all different forms of loans that are packaged and sold on the commercial secondary market.  This market, has taken a firm beating, all starting with the sub prime mess (giving borrowers that where "mortgageable" a mortgage). 

As the Mortgage Bankers Association recently stated, "The secondary mortgage market is broken".    It will likely be some time, perhaps 2010 before this market returns to some form of stability.  One of the primary problems, is a complete lack of confidence from investors, ie the institution that buy the mortgage bonds.  They have been burned and will likely remember their losses for many years.   Without purchasers of the loans/bonds, their is no liquidity to the secondary market.    

Banks

Traditional banks have several option on what they do with apartment loans after they fund, which often makes them one of the better lenders for smaller loan request ($400,000 - $5,000,000).  Like the insurance companies, banks can elect to portfolio the loan and hold onto it long term, or turn around and sell the loan to Fannie Mae or Freddie Mac if they need/want liquidity.  Essentially with this example they are funding the loan, than selling it to the government to make an immediate spread and replacing their capital. 

Dealing with banks can be cumbersome.  Often there underwriting is slow and can be political.  Banks also have their own problems now as many have liquidity issues, and or have stopped lending untilthe economy improves.  Knowing which banks are strong and are still actively funding is key to getting your loan closed.   We make it our business to know how these viable banks are!

Apartment Lender - Government Sponsored

Freddie Mac, and Fannie Mae are providing the liquidity to the apartment finance industry today.  As mentioned above there are multiple types of lenders that work with these institution and sell their debt to them.  Though the these government institutions can add a layer of bureaucracy and additional guidelines to meet.  They are still buying apartment loans and are the most viable source of capital today.  Though borrowers can not deal with them directly and have to work with an apartment lender or bank (like us) that focuses on the Freddie Mac and Fannie Mae programs.    

If you are interested in refinancing or purchasing an apartment building, please fill out our pre approval form so that we can provide you meaningful answers.  Should only take a few minutes to get done.  With the information you provide, we can give you accurate, meaningful answers.