Rate Desk April 7, 2020

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April 7 edition
  • DJIA up 22,789
  • V-shaped recovery possible
  • Stocks on track for 2-day win
  • US Treasury opened at .77
  • FHA 223(f) tightened 2.57%
  • FHA 221(d)(4) still 3.30%
  • Fannie 3.36%
  • Freddie 3.44%
  • Freddie requires fully amortizing DS Reserve
  • 6-9 months regardless of due diligence
  • Certain cases allow for 12 months and 18 months for specialty (like student housing)
  • FNMA on typical Tier 2 75-80% LTV, 1.25 DSCR for 12 months of P&I
  • Consider spread between cap rates and 10yr UST Yields
  • Average cap rate (5.75) – .72 = 5.03 spread
  • Investors choose MF real estate over risk-free gov’t bonds