Rate Locking a Multifamily Agency Loan

2019-06-17T16:13:14+00:00By |Financing|

As a result of continued strong demand for multifamily acquisitions in the U.S., capitalization rates being paid by investors can easily be equal to or less than debt constants on multifamily agency loans. For example, if you are purchasing a property in a high demand market you might need to acquire the property at a capitalization rate at or below 5%. In today’s interest rate environment (June 2019), your debt constant for a market rate non-green certified property could easily exceed the purchase capitalization rate by 1% (5.75% to 6.00%). If interest rates increase as the loan application is