Conservative Loan Philosophy

[Ed Matthews]

Suppose you were evaluating a potential 5-year MF deal. Which approach to loans would you consider most conservative at this point in the market cycle?

A 10-year fixed from Freddie Mac sounds pretty conservative. But if the economy slides into recession next year, the Fed would very likely lower rates, so an ARM could supply extra cushion against lower-than-expected rent increases in subsequent years. Would that make an ARM actually more conservative?

Thoughts?

Thanks!

Ed Matthews