Multifamily Portfolio Loan ($12M - Denver, CO)

[Ian Stuart]

Hi Bigger Pockets: 

I have a client who is bidding on a portfolio of six multifamily properties totaling 98 units in Downtown Denver. They're seeking a portfolio mortgage (either crossed or uncrossed) of ~$12M (70% LTV; 1.20x DCR; 6.50% DY) - and was wondering if anyone had any portfolio lender recommendations?

Insitutional-ish client. Primarily IRR driven. Attracted to max leverage, partial term interest only loan executions similar to standard Freddie / Fannie mortgaes. Any portfolio lenders comfortable lending at 70% with half term IO, 25-30 amortization, and limited P&I/tax/insurance/replacement reserves would be right in their sweet spot.

Little background on me - I'm a mortgage banker at Berkadia in Seattle specializing in conventional and small balance Freddie Mac and Fannie Mae mortgages - typically >$20M. Agency guy through and through. As a Freddie Mac Seller/Servicer and Fannie Mae DUS Lender, my immediate inclination was to take the deal to Freddie SBL and Fannie Smalls. 

Unfortunately, Freddie doesn't like cross collateralized portfolio loans under $50M in aggregate - they're more inclined to do six individual one-off deals, which puts upward pressure on my client's closing costs and  origination fees. Fannie could do the portfolio, but their minimum 7.25% DY requirement is killing my loan proceeds. In addition - in order to hedge against COVID related unemployment and rent delinquency risk, Fannie now requires 18 months P&I, 12 months tax/insurance/replacement reserves due at closing. This is not attractive - especially at a high 3.00% (pushing 4.00%) rate with no IO.

95% of the time, this client goes for agency financing - but given the nature of this small loan portfolio - I don't think agencies are the right puzzle piece here. 

Any recommendations would be much appreciated!