Prudential Kicks Off New Loan Program for M-F Property Owners
- May 04, 2010
May 4, 2010
By Barbra Murray, Contributing Editor
Endeavoring to help bridge the financing gap for multifamily property owners who do not meet the requirements for Fannie Mae or Freddie Mac permanent loans, Newark, N.J.-based Prudential Mortgage Capital Company has created the Agency Gateway program. The new vehicle will provide short-term loans for refinancing and acquiring multifamily assets.
Borrowers will be able to secure loans ranging from $5 million to $25 million, using as collateral completed or renovated apartment properties with potential; essentially, assets that have yet to reach significant occupancy levels but are situated in markets with pending demand.
“In addition to offering our multifamily borrowers more flexibility for financing higher-quality properties, we believe this program complements Prudential’s existing Fannie Mae DUS Lending Program, as well as our Freddie Mac Program Plus program offered through Prudential Johnson Apartment Capital Express,” David Durning, senior managing director of Prudential, noted in a prepared statement.
After taking quite a beating due to the recession and job losses, multifamily is poised for a recovery, moving in lockstep with the economy, according to a first quarter report by Marcus & Millichap Real Estate Investment Services. The sector appears to have hit bottom. Demand began to pick up gradually with the slowdown of job losses in the second half of 2009, and numbers from the beginning of 2010 served as confirmation of an impending turnaround.
The vacancy rate held steady at 8 percent in the first quarter of this year, marking the first stabilization after eight consecutive quarters of increases. Marcus & Millichap predicts that conditions will continue to improve, resulting in a “healthy recovery of fundamentals” in 2011.