Fannie Mae and Freddie Mac Will Not Lend on Apartments with Tuck-Under Parking
The conduits are making are making CMBS loans again, and the most preferred product is multifamily loans. The problem is that the agencies - Fannie Mae and Freddie Mac - have better rates and terms for apartment loans than the conduits. The agencies will also go higher in terms of loan-to-value.
The conduits are therefore looking for scratch and dent apartment loans that don't quite qualify for the agencies. One reason an apartment building might not qualify is that it cannot satisfy the 90/90 Rule. Fannie and Freddie will not finance an apartment building that has not been at least 90% occupied for ninety days.
Another fatal flaw for Fannie and Freddie is tuck-under parking. Tuck-under parking is basically carports underneath the building. The concern is that the building could collapse in an earthquake. Below is a picture of tuck-under parking.
Although the agencies won't finance properties with tuck-under parking, CMBS lenders will gladly make these loans. If your apartment building is also struggling to maintain 90% occupancy, you should consider a conduit loan.
Do you need a conduit loan right now? You can apply to several dozen conduit lenders in just four minutes using C-Loans.com. And C-Loans is free!
You can also write to me, George Blackburne, at firstname.lastname@example.org. Simply insert the words, Conduit Apartment Loan Request, in the subject line of your email.