Builder confidence in the multifamily market remained steady in the first quarter of 2018, according to both the Multifamily Production Index (MPI) and the Multifamily Vacancy Index (MVI), reports released by the National Association of Home Builders (NAHB).
“Multifamily builders and developers are reporting solid demand around the country, as shown in the vacancy rate for the first quarter,” said Steve Lawson, President of The Lawson Companies in Virginia Beach, Va., and Chairman of NAHB’s Multifamily Council. “We anticipate steady demand through the rest of the year as household formations continue to grow.”
Both indices remained the same from the fourth quarter of 2017, with the MPI at 53 the MVI at 42.
“The stability of multifamily builder confidence is consistent with NAHB’s view that the market has reached a healthy, sustainable level of production,” said NAHB Chief Economist Robert Dietz. “The overall strong economy is supporting demand and balancing supply-side issues many builders are facing, including shortages of labor and buildable lots, and the recent surge in lumber prices.”
If you’re not already closing commercial mortgages for multifamily property owners, now is a great time to get started.
These properties are reliably popular with commercial lenders. There are a number of factors that will affect which type of commercial lender will be able to finance any given request, but banks and private lenders alike lend on these properties.
So, what do you need to submit a request? If you’re sticking with non-bankable borrowers in the small-balance niche, generally all you’ll need to get started is a completed 1003, a credit report with scores and tradelines, a summary of the deal, a rent roll and photos of the property. Every lender has its own requirements, so find out what else might be needed for yours to evaluate a commercial mortgage request.
If you’re a residential mortgage broker looking to break into the commercial market, multifamily loans are a great place to start. They’re not all that different from the properties you already finance, so you can use the skills you’ve already developed to begin expanding into commercial mortgages. As you continue to work with commercial mortgage lenders, you’ll learn more about the industry and other property types, leading to more closed deals and increased income.