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Wells Fargo Multifamily Capital Article - Whose Dollar is Greener?

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By: Tony Petosa, Nick Bertino, and Erik Edwards of Wells Fargo Multifamily Capital

Despite a turbulent start to 2016, with the capital markets roiling from weakness in China and a downward spiral in oil and stock prices, borrowers have an abundant array of attractive financing options available for acquiring or refinancing Manufactured Home Communities (MHCs).  However, due to recent volatility, astute investors should take a thoughtful approach to navigating the field of potential lenders.  While the same lending alternatives are available since the economic recovery gained traction in 2012 - Fannie Mae, Freddie Mac, conduit lenders, banks and thrifts, and life insurance companies - each lender offers distinct advantages/disadvantages as it relates to loan structures, interest rates, closing costs, servicing, and their responses to the whims of the market.

 

From a general market perspective, there are still plenty of reasons for commercial real estate investors to be optimistic.  Treasury yields are currently near all-time lows, interest rate spreads for most lenders remain at favorable levels, and underwriting guidelines continue to moderate due to an ever expanding supply of active lenders in the market.    Employment and housing sectors have improved in the past year as U.S. unemployment dipped below 5% for the first time in many years.  Barron's recently reported that despite the turbulent markets, it expects the U.S. economy to avoid recession and grow at a 3% pace in 2016.  Additionally, while a precipitous fall in oil prices has had a negative impact on oil patch" locations