Commercial Mortgage Financing advisors:
Winter & Company arranges commercial mortgages over $5 million for multifamily apartment buildings, co-op underlying mortgages, mixed-use properties, retail properties, office buildings, hotels, industrial and net-leased properties. We work with seasoned real estate investors and developers of multifamily rental buildings and condominium developments to arrange optimal financing for their projects. We arrange Acquisition Loans, Bridge Loans, Construction Loans and Permanent financing for both income-producing and owner-occupied properties nationwide. We address all components of the capital stack including Equity Participations and Joint Ventures, and we excel in providing compelling solutions for Structured Finance and other complex assignments. We are based in midtown Manhattan and most of our commercial mortgage advisors have decades of experience as well as a deep network of contacts in both the capital markets as well as regional and local banks.
Back when the world was young and construction financing was still flowing like a fast-moving river from lenders to developers, few would ever have chosen to take an FHA construction loan. You need to apply for them correctly, they take a long time to close, you are essentially forced to utilize union labor, there is a lot of red tape and construction oversight, etc. However these days, with construction financing as rare as hen’s teeth, a lot of people are re-thinking FHA financing, and it’s starting to look like the prettiest girl in the room. As we approach 2010, for new construction of an apartment project with the right characteristics, these programs can be a godsend, and in many cases, the only practical way to get a new project built.
Navigating the rules and customs in this often arcane and byzantine precinct of the construction world can be daunting, and having the right advisor (jungle guide) with the requisite savvy and experience to help you navigate this complicated world is nothing less than essential.
The following piece is by my colleague Henry Berliss, who has been handling these transactions for many years and knows the ropes. So if you are looking for a construction loan to construct a new apartment building read the article below and then contact Henry (henry@winter1.com (212) 532-1122 x117) to see whether your project can qualify under this relatively high-leverage (and did I mention non-recourse?) program.
Click here to Show article by Henry Berliss, EVP on obtaining CONSTRUCTION FINANCING in today's tough marketplace.
A Surprising Source of High-Leverage, Non-recourse Construction Financing
By: Henry Berliss, EVP | Winter & Company
In the 37 years I have been involved in real estate finance and development, the current market is the toughest I have ever been through. As it turns out, the area where I started in 1972, government financed housing, is now the source of the majority of my business, i.e. several development and refinance deals in the $25-30 million range. That early experience gave me an understanding of programs and process, so I know to effectively connect with experienced, approved intermediaries in approaching these agencies.
Most brokers and borrowers know of Fannie Mae, Freddie Mac and HUD/FHA. Most have done Freddie or Fannie deals. Until recently Freddie and Fannie did relatively high-leverage deals quickly, but lately their underwriting has become more conservative and the deal processing takes longer. HUD/FHA has been the last choice for most of us due to long processing time and cumbersome requirements.
However, as developers find their historical lenders either not lending at all or offering 60-65% of cost financing, HUD/FHA becomes a viable alternative when it can offer financing that can be in the 90%+ range for development (221d4 –fixed rate for construction and 40 year permanent), currently under 7%, or refinance (223f – 35 year term) currently under 6%, and it’s all on a non-recourse basis. These are market rate programs that do not impose rent regulations or restrictions beyond those imposed by the municipality of the project.
Rather than go into the details of the programs here, I would suggest a phone conversation to address the unique characteristics of your prospective transaction. Suffice it to say that HUD/FHA is relaxing some requirements to accommodate more deals in the current market, even allowing construction projects that are in the ground but not above it. The best way to understand the programs is to consult with a knowledgeable person. These programs will be in great demand for the next couple of years until the conventional market revives. I don’t expect HUD/FHA to add any new staff to handle the increased volume, so it is likely that the 4-6 month processing periods may get longer. My suggestion is to let us help evaluate possible deals and, for those that appear to be a good fit for the HUD/FHA programs, to commence the process and get in line sooner rather than later. We and our HUD/FHA approved processors operate on a nationwide basis.
Whatever our client's goals, our goal is to make it happen. We are commercial mortgage experts seeking to add value to your next transaction.
If time constraints are your main concern, visit www.w-financial.com for quick-close loan situations. W Financial is a DIRECT PRIVATE LENDER appropriate for short-term bridge loan scenarios.
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