Apartment and Healthcare Loans - Status April 24 2009

The State of Apartment and Healthcare Finance - by Kendall Realty Advisors, Scott Kendall VP-CFO

FHA 223(f) Rates in 5.25% to 5.75% range including MIP
Large Cash out Requests are getting looked at very carefully. 1.17 to DSC
80% cash out loans (Maybe) 85% loans to purchase or up to 85% refinance no cash out.


Fannie Mae Freddie Mac Multifamily Rates about 5.5% 75% loan to value cash outs.

80% Purchase transactions. 1.25 to 1 DSC

FHA 221(d)(4) - Affordable Deals more likely to be approved. Market Rate Deals ONLY IN VERY STRONG MARKETS (ex: Downtown Chicago new construction not likely to be approved).

In conclusion, refinance money is available but large cash outs transactions will not be approved above 75% Fannie Mae 80% FHA (Kendall Opinion)

New Construction Waivers and 85% loans will be approved for stabilized recent construction transactions as part of the emergency waiver.

All in All apartment lending even with more conservative lending practices is in the best shape of commercial lending programs due to the three agency programs.

FHA 232 Lean  The FHA 232 LEAN program is great for rehabilitation loans to meet new federal safety standards and for assisted living facilities.

FHA 242 Hospital Loans - Program much faster and streamlined. We are working on several transactions, the rates are low but higher than multifamily loan rates, since we can not use GNMA to provide a AAA rating.

LEAN PIPELINE AND CLOSINGS

LEAN 232 Pipeline as of March 6th, 2009
FHA # Requests – Purchase/Refinance – 208
FHA # Requests – New Construction – 41
FHA # Requests – Section 223(a)(7) - 1
FHA # Requests – Section 241(a) – 1
FHA # Requests – Sub-Rehab – 2
FHA # Requests – Section 223(d) – 2
Applications In – Purchase/Refinance –40 (with 18 more scheduled to come in shortly) Applications In – New Construction – 7
Applications In – Section 223(a)(7) – 1 Firm Commitments Issued – 18 Applications CLOSED –Purchase/Refinance – 9 Applications CLOSED –
New Construction – 1 closed - (4 pre-apps completed)

Hud Texas News:

Estate Villas of Krum


On December 19th, the Ft. Worth Program Center closed an insured 221(d)4 new construction mortgage for the Estate Villas of Krum, a 140 unit to-be-built property located in Krum, TX.

Krum Estate Villas, Ltd., the borrower, is a for-profit partnership sponsored by Mr. Byron Ballas. While this was the sponsor’s first FHA-insured project, the development team featured a solid mix of both FHA and non-FHA multifamily experience.

The property is located near two new schools and several new subdivisions. Although growing, the immediate area is still fairly rural and “underserved” in terms of multifamily housing. Estate Villas of Krum will help satisfy some of this area’s demand for affordable apartment housing.

The $12,997,400 mortgage was closed at a 6.76% interest rate.