Video Time: 2:05
Borrowers had to put up around 10% of the loan amount at closing of additional reserves. As a result, Fannie saw 3 good months (April, May and June) of collections and then turned that down slightly to only around 5% of the loan amount. A lot of borrowers are raising funds and when they get it back from Fannie and Freddie they will most likely put it into the units for upgrades and improvements.
Video Time: 3:03
In the first quarter of 2020 there were still a lot of bridge loans, Fannie and Freddie financing. At that point, lenders were just trying to get deals closed. After a pause for a few months, a lot of deals came back out. People were getting comfortable with the Fannie and Freddie reserves. Instructors say they are currently as busy as ever.
Video Time: 4:44
Different markets perform differently. There is such a variety of submarkets, it makes it difficult to generalize As compared to other markets, what is compelling about Texas is the right to work environment as well as a lack of income taxes and the affordable nature of housing. Instructors agree that the fundamentals in Texas markets are very strong. Texas’ low tax, business friendly environment has benefited the multifamily market in recent years.
Video Time: 6:03
There’s a lot of equity in the market right now. Experts say that most product was sitting on the sidelines waiting out the pandemic. There was pent up demand looking for multifamily. Multifamily is the most stable property type given the current economic landscape and recession, according to experts in Texas. Cap rates are actually lower than they were before the pandemic. Across Texas CRE, there is a more aggressive buying market than it was pre-COVID, according to experts.
Video Time: 3:22
Texas markets are relatively easy to build in, so developers have to be careful not to buy in to the cycle at the wrong time. Experts are starting to see a firming up of class A rents. That is due to the supply falling off, people coming in from out of state and strong job growth continuing. People still need a place to live and class A demand is higher right now than it has been due to people spending more time at home. In Texas, rents have mostly returned to pre-pandemic levels.
Video Time: 2:56
For market rate workforce housing, experts have seen good occupancy generally. Class B has maintained an availability scarcity that class A has not. As requirements for new builds have gone up, the difference in pricing between A and B has gapped out in recent years has been substantial. Before this crisis hit, multiple experts and economists agreed that there was a substantial shortage of affordable housing units. Certain markets were oversupplied in Class A.
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Video Time: 5:21
The challenge with Texas markets has always been to match the job growth with the pipeline of new development. Job growth has continued at a high rate, even during the COVID-19 pandemic. But, the pipeline for new development has slowed significantly. Experts expect to see more job growth, especially as the COVID-19 pandemic subsides.
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