“I have been receiving an increasing number of inquiries from mortgage bankers and brokers asking how to make a living until the commercial mortgage lending markets improve to historical levels,” said Michael D. Sneden, Executive Vice President at ValueXpress. “My advice is to market a viable loan product in markets where there is little competition, and that is the HUD 223(f) multifamily refinance loan program in pre-review states and metropolitan statistical areas (MSAs) as determined by Fannie Mae.” For multifamily properties in need of refinancing, Fannie Mae, Freddie Mac and HUD 223(f) are basically the only competitive programs available. However, Fannie Mae has elected to reduce loan to values (LTVs) to 65% in certain states and MSAs and Freddie Mac is cautious in these areas as well. HUD has no such restrictions. “So, to generalize, there is no non-recourse competition whatsoever in these markets,” Sneden said.
Specifically, the Fannie Mae pre-review states are Ohio, Michigan, Indiana, Nevada and Florida. Pre-review MSAs are New Orleans, Houston, Cincinnati, Phoenix, Atlanta and the Inland Empire of California (Riverside/San Bernardino counties). “So my suggestion is to find good performing multifamily properties in these areas.” Sneden said. “You will have little or no competition except from other HUD lenders.”
“We are tracking multifamily maturities of CMBS conduit loans in pre-review states and MSAs,” said Sneden. “As an incentive (and to gauge whether anyone reads these notes) for any mortgage banker or broker in a pre-review state or MSA, we will provide one multifamily loan lead for a maturing CMBS conduit loan in your pre-review state or MSA if you are willing to sign a confidentiality and non-circumvention agreement.” Contact Michael Sneden at firstname.lastname@example.org for details.