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Today’s webinar is hosted by Alison Williams, Allison Herrera, and Tim Cotter. Download Webinar Slides: https://explore.walkerdunlop.com/sbl/... Learn More About Walker & Dunlop Small Balance Lending: https://explore.walkerdunlop.com/sbl/... Get a Loan Quote for a Five- to 150-Unit Multifamily Property: https://explore.walkerdunlop.com/sbl/... Alison Williams is the Senior Vice President and Chief Production Officer for Walker & Dunlop. She carries 20 years of real estate experience in the company, previously as a broker and a Senior Director in W&D’s Capital Markets Group. Allison Herrera, Senior Director and the Midwest Production Head for W&D’s small multifamily lending group, has two decades of commercial real estate work under her belt. Tim Cotter, a Director at Walker & Dunlop, is responsible for nationwide loan origination and is based out of W&D’s Milwaukee office. The webinar begins with Tim briefly describing the U.S. Treasury Index and the significant trends over the years. Treasury indexes have doubled a quick run-up in the past six months, and earlier in the week, it peaked at 3.48%, which he attributes to inflation. When asked how many multifamily loans they have closed with a 5% interest rate, 57% of the audience said none. Allison emphasizes that five and seven-year Treasury rates should also be considered and that the experts at Walker & Dunlop are apprised of the impacts and constant Movement of interest rates. The predictions for 2023-2024 remain uncertain, but interest rates are expected to increase in 2022. On the other hand, Alison points out that it is highly critical for investors to work with lenders that can canvass all debt sources. In 2021 alone, Walker & Dunlop sourced transactions from 250 different providers. The multifamily debt sources are differentiated, starting with Freddie Mac and Fannie Mae. The two are government-sponsored, generally the most attractive, agnostic to economic changes, and focused on providing affordable housing to all. They allow 80% loan, cash-out-of-debt service, flexible prepayment structures, and financing for non-US citizens. Life companies target low-level, institutional quality, well-leased properties in the metropolitan area. Their loans differ depending on the market, as they are willing to stretch for the small and middle space. CMBS is generally “the last resort” for multifamily loans as the goal when utilizing this is to remove as much friction as possible. Bridge financing is geared toward properties that require additional stabilization or rehabilitation funds for upgrading, such as in the case of fire. It is considered a stepping stone to a refinanced permanent loan transaction, and the loans are typically 2-5 years with floating interest rates. When managing interest rate risks, Allison suggests locking your interest rate when it rises, utilizing Fannie Mae’s practice of holding the rate upon application. Key Points In The Webcast: 00:00 Introduction 00:40 Alison Williams welcomes Allison Herrera and Tim Cotter 02:31 Overview of the U.S. Treasury Index and factors for fluctuation 05:47 Closed multifamily loans with over 5% interest rates 07:25 Expected rising interest rates for 2022 08:28 Lenders and debt-sourcing 09:31 Freddie Mac, Fannie Mae, and HUD 13:37 Life companies, loan amounts, and CMBS as a last resort 17:02 Bridge financing and pro forma net operating income 18:40 Banks, credit unions, and drawbacks 22:27 Key strategies for managing interest rate risks 25:35 Correlation between cap rates and interest rates 27:37 Advice in achieving higher leverage point for debt 35:20 Optimizing bridge financing with a HUD223(f) loan 35:35 When to use HUD over Fannie Mae and Freddie Mac 39:43 Changes to agency fees and options for non-recourse 41:23 WD financing for other interests and bridge loans for 1031 sales 41:55 Movement of Spreads and best choice for multifamily construction