Greater Boston - Commercial Rates

[Colin Kelly-Rand]

Hi all,

I figured out try to add some value to someone's day. If you are curious where commercial rates are on any given day in the Boston area, a good place to start is to head to FHLB and check out there rates for the Long-Term Classic Advance Rates for a 5 year loan (3.87% today) and then add a 2%-2.75% spread. So today's rate for a 5yr fixed is around 5.87% to 6.62%.

And the rate will float until you likely get your commitment letter 45 days later. So make sure you are working in some room into your pro-forma. Secondly, if your getting a commercial loan, the rate is only one part of the conversation. Commercial loans are flexible - you can negotiate on prepay, LTV, points, escrows, cash-out, construction funds, earn-outs, assumable, loan term (length) etc.

If your looking for FNMA 10 year Multifamily rates for cash flowing properties you may be looking at 2% spread over the 10yr US Treasury (~3.37% today) which would indicate a 5.37% rate. Much juicier than 5.87%, but also not as flexible and typically not for construction (they do have some programs for rehab of larger projects). That's just indicative, actual rates vary widely based on LTV, DSCR, affordability, location, loan size, etc. When I was underwriting at Walker and Dunlop I would check marketwatch.com 10 yr treasury rates every morning to see where rates were at. When the treasury dropped, work picked up. The worse stocks do (the more fear in the market) the lower the treasury heads and FNMA/FRE rates have usually gone done with it. 

What rates have you all been quoted recently? 

[Devin Peterson]

Quote from @Colin Kelly-Rand:

Hi all,

I figured out try to add some value to someone's day. If you are curious where commercial rates are on any given day in the Boston area, a good place to start is to head to FHLB and check out there rates for the Long-Term Classic Advance Rates for a 5 year loan (3.87% today) and then add a 2%-2.75% spread. So today's rate for a 5yr fixed is around 5.87% to 6.62%.

And the rate will float until you likely get your commitment letter 45 days later. So make sure you are working in some room into your pro-forma. Secondly, if your getting a commercial loan, the rate is only one part of the conversation. Commercial loans are flexible - you can negotiate on prepay, LTV, points, escrows, cash-out, construction funds, earn-outs, assumable, loan term (length) etc.

If your looking for FNMA 10 year Multifamily rates for cash flowing properties you may be looking at 2% spread over the 10yr US Treasury (~3.37% today) which would indicate a 5.37% rate. Much juicier than 5.87%, but also not as flexible and typically not for construction (they do have some programs for rehab of larger projects). That's just indicative, actual rates vary widely based on LTV, DSCR, affordability, location, loan size, etc. When I was underwriting at Walker and Dunlop I would check marketwatch.com 10 yr treasury rates every morning to see where rates were at. When the treasury dropped, work picked up. The worse stocks do (the more fear in the market) the lower the treasury heads and FNMA/FRE rates have usually gone done with it. 

What rates have you all been quoted recently? 

 Probably the best thread post I’ve seen in a while. All SO TRUE! If anyone needs take a look at some deals I have a good connection with a Salem bank that has been great to me over the years. Lets connect!