|Given the agencies’ reduction in available capital for market-rate deals, borrowers looking to finance higher-end multifamily housing may want to get into the queue early. Those considering refinancing should start the process earlier in the year, versus in the later quarters when the funds for that type of product may be depleted.
Investors financing workforce housing, particularly deals at 60 percent AMI or below, have more leeway on timing. In the past, the FHFA has considered deals outside the cap that fulfill its affordable housing mission, and that appears to be something it may consider again if the GSEs hit their overall goals earlier than expected. “As we continue to address the shortage of affordable housing, especially amid the COVID crisis, FHFA will keep a close eye on the multifamily caps to ensure that they are sufficient and serve to increase the supply of affordable housing but do not crowd out private capital,” noted FHFA Director Mark Calabria in a press release.
President-elect Biden has outlined an ambitious plan for affordable housing, a critical issue amid the economic wreckage caused by the pandemic. Biden’s platform contains two main pillars: provide more federal assistance to Americans who can’t afford housing and compel cities to reduce regulations that impede affordable housing creation. Getting the plan through Congress will be difficult if the Senate runoff races in Georgia on January 5 result in a Republican majority. In the meantime, a bipartisan group of senators unveiled a $908 billion stimulus package this week. While it doesn’t include a new round of direct payments to Americans, it would renew the federal unemployment benefits that expired over the summer, at a rate of $300 per week for 18 weeks (down from $600 in the previous benefit). The plan would also provide $160 billion for state and local governments and $288 billion for small businesses, and extend the eviction moratorium, a hardship for multifamily owners who must still pay their mortgages. Sen. Mitch McConnell announced he is working on a separate proposal with the Trump administration.
With the reduction of cap availability in agency financing, multifamily owners and investors should seek out an advisor who can clear the entire market of lending sources. One reason MMCC has experienced dramatic growth in recent years is that we are ideally positioned to help clients locate and secure the right capital solutions for their specific needs. We invite you to leverage our unparalleled network of banks, insurance companies, CMBS and other lenders, and our capital advisors’ expertise to position your portfolio for success.