If you’re a banker, you might be feeling the stress in the tightening CRE mortgage guidelines.
If you’re a CRE broker, you might be feeling the stress of your clients struggling to find funding.
We’re all busier than usual, so I’ll keep this short and to the point. This article is not doom and gloom, or fearmongering. Until we address the ever-present problem, we can’t discuss the solution. There is in fact a real-world solution to the reduced lending in our CRE-Covid world.
Bad News & Good News
BAD NEWS
Fannie Mae and Freddie Mac are the cornerstone of stabilized Multifamily lending in the US. They typically offer higher LTV’s, lower rates, and fees. Everyone is feeling a little pain during the Covid-19 era with changes happening in every sector of society. Fannie Mae and Freddie Mac are no exception and they have pulled back on their lending guidelines with lowered LTV’s, and increased credit and reserve requirements. Many family offices, banks, debt funds, and institutional lenders have hit pause on lending or closed their doors.
Whether you’re a banker or a CRE broker, you DON’T have to lose your client because of Covid!
Is This Your Client?
GOOD NEWS
So, where does your client obtain funding for their commercial property?
Although certain lenders may limit funding or tighten loan guidelines, there are alternatives. There are many other lenders who are more than happy to fund the commercial property. But, you ask, who are they and where can they be found? This is where a commercial mortgage broker plays a role. Don’t run away now, and don’t let that scare you. Many good and reputable CRE mortgage brokers have access to many lenders who are still funding. Yes, even in this Covid environment. They know who’s lending and their lending thresholds, and they have negotiation leverage for both approval and terms. Most offer a referral fee for simply referring your client to them.
A CRE mortgage broker can find those hidden, unknown lenders who aren’t afraid to take advantage of this market and continue funding multifamily, retail, office, warehouse, industrial self-storage, and mixed-use property types.
EVEN BETTER NEWS
Don’t think of working with a CRE mortgage broker as giving away business, but instead, consider them a partner for your benefit, so you can maintain a good relationship with your client. You’re helping your client in their time of need. You’re their saving grace.
There it is. There’s your magic solution to the bad news. And your client will be ever grateful for leading them to a funding solution instead of giving up on them. In the long run, they’ll be your return client because you’ve proven yourself a knowledgeable asset to them.
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