How to learn about agency debt

[Dustin Garrels]

Can anyone suggest a good resource to help me learn more about agency debt?

[John Lenhart]

Nothing better than trial by fire. I do not know of any books or anything that give you a step by step overview of it if that is what you are looking for. 

Ultimately, start talking with bankers, get their thoughts on the products out there in the marketplace. Depending on your property, CMBS may not be a fit while a Life Insurance loan could be. If you are in multi-family Fannie/Freddie could be a great option. You will want to ask questions as to the prepayment schedule as it varies by product and can be negotiable in certain cases. Term length is also negotiable and you will want to ask questions to your banker/loan broker.

Don't be afraid of coming across like a newbie, you don't know what you don't know. These brokers and bankers (the good ones) make their money by educating you on the various choices you have to get you into the right product because they want repeat business. Typically, you are not doing just one perm loan in your life.  Dont be afraid to ask your banker what the difference between yield maintenance and defeasance are, or if you want a step down schedule. Dont be afraid to question them about a legal opinion letter or even the personal recourse carve outs required in an agency loan. Yes, it may make you sound like a newbie, but the worst thing they will tell you is no. 

I guess, if you are using a reputable loan broker or banker for such a loan, they are not going to be sharks and are there to help you and educate you along the way. They want your business, and it does not pay for them to be a shark when they are dealing with a sophisticated clientele. It is much better to them to be in the role of educator to grow their clientele that way.