Freddie / Fannie Multifamily

[Kevin Owens]

If you are navigating an MF purchase or refi of $1.5MM or more, please reach out with any questions. I have closed on $2.5BN of agency business. Maybe you'd like to know how agencies look at expenses or to know what the closing speed looks like....Ask me anything, I'm well versed in the agency space.

[Kevin Owens]

There are so many ways a deal can go, it really is case-by-case, along with all elements outside of the numbers. Fannie / Freddie provide non-recourse loans in the MF space, with the exception of bad-boy carve outs (no willful neglect, maintain your O&Ms, repair as needed, don't mix your SPE with other assets, etc). Other elements are at the deal level. They like to see in general (this purely across the board and does not take into account market, expenses offset elsewhere in the line items, etc...) $650 to $900 per unit in repair and maintenance, $1,000 per unit in payroll and $350 in general and administrative, along with management fees, replacement reserves, etc. This is of course how the deal is underwritten, not how is required to b operated. Individuals like myself negotiate these line items on a borrower's behalf.

To encompass the agency programs into one post, would take a very long time. There are many deal elements like prepay, reserve funding, crime mitigation plans (if needed), the green program (which is essentially defunct), affordability thresholds, buy-sell transfers, etc...

Fannie / Freddie do not lend direct in the MF space. They have short list of licensed banking shops, like Berkadia, that facilitate the process. This direct relationship means that for those who are licensed, the ability to problem solve is exceptional, especially with a high volume shop. Firms outside of those who are licensed are brokering to firms that are licensed. As a borrower, you want to steer away from this, as it means a clunker process and potentially a higher rate. Always go direct when able. It pays in the end. Not all licensed firms are created equal. Most borrowers prefer a private company that is not a "bank". Firms that are publicly traded or have traditional banking practices in place, treat deals differently. 

Ideally, if anyone has questions about the programs, reach out. Each deal is different. Maybe you're curious about what third party reports are needed or net worth and liquidity requirements. The space I operate in is $1MM debt placement with my average deal size around $25MM and includes asset classes outside of MF, like office, retail, industrial. 

If anyone has a question, reach out. I'm an open resource and very much a phone person.