Commercial Real Estate Finance

Posts Tagged ‘FHA’

Despite 22 year record high national vacancy rate of 7.8%, the multi-family sector has performed well compared to other asset classes. Several multifamily properties have recently traded at 6.5% cap rates, demonstrating investor confidence in this market sector. I am bullish on the multifamily sector for several reasons.

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Does it really make sense for regional banks to be in a rush to pay back TARP funds?

Is the FHA being too risky? Will future aversion to such risk stave off private investors?

I recently bought a duplex both as an investment and as a place to live for the next few years. Because I intended to live there and it was less than four units, I was able to get a 96.5% loan to value, 30 year fixed rate 5.00% mortgage. I know, I was amazed as well. Uncle Sam made the deal even sweeter for me by kicking in an $8,000 first time homebuyer tax credit. From my perspective the government made this a no brainer- all I had to pay for was closing costs, because the $8,000 tax credit will cover more than my down payment. Effectively, the government guaranteed my mortgage, allowing me to borrow 96.5% at a ridiculously low rate, and then gave me the other 3.5%! This is all great and good, but under this scenario, will I stay in the house if the market continues to get worse? With a 96.5% FHA loan during a turbulent market, it would take only a small change in property values for me to find myself underwater.

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The Week of Oct 31-November 6

-  Warren G. would be proud of the government, as they regulate commercial mortgage modifications.

- The founders of the Related Cos. are forming a new bank and acquiring a seized lender.

-  Is “Extend and Pretend” really a viable option?

- Peter Cooper Village is hurting more than just its owner.

- Are banks not ready for commercial mortgage losses?
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The Week of May 22-29

- The 177-Store anchor Blue Denim chain filed for bankruptcy.

- HUD took action against 120 FHA -approved lenders earlier this week.

- Grubb & Ellis reported Wider Quarterly, and Yearly Losses.

- A new report came out detailing that Manhattan Sales have reached a 25 year low.

- FHA announced it is allowing first time home buyers to sue the much ballyhooed tax credit towards their down payment.

- Fitch Ratings has downgraded First Industrial.

- Giant real estate player Tischman Speyer has announced they will sell some California assets to pay down debt.

- News broke on Tuesday that two more banks have failed.

- Sequoia Equities announced the acquisition of a $75M multifamily luxury apartment complex in Orange County, CA.

- S&K Menswear will be closing all remaining stores in bankruptcy

- A Westin hotel developer accused a local councilman of extortion.

- Sunstone sold a 274-room Marriott.

- Paramount Realty bought a prime retail center.

- Freddie Mac could help out the commercial backed securities market with
K-Certificates.

- LandAmerica sold 6 of its subsidiaries last weekend.