Haven't executed a Freddie/Fannie agency debt financing for a new acquisition in several years. I'm getting updated pricing and sizing metrics from various sources, but was curious as to how either agency pegs the NOI which is used to ultimately size the funding amount.
I am used to using the existing (i.e. T-12 or T-3) income and expenses, but assuming the expenses are above market due to mismanagement etc, would either lender allow for a re-calibrated expenses to be used to size the loan?
On the income side, I am assuming that whatever the current in place rents are (along with vacancy/concession/bad debt) would be used, regardless of how potentially below market they might be?
You're correct on the revenue although vacancies have standard UW %. Expenses can be underwritten lower if the borrower can prove it out and comps also show lower expenses.
Thanks. I am assuming that agencies still use the greater of 5% or actual market/submarket vacancy rate when designating a loss factor? What about concession/bad debt/etc? Can I get away with using 5% total or will they want to show additional loss factors beyond "vacancy"?
Autem aspernatur voluptatibus laborum aut autem ea non voluptate. Et eos quis facere autem ad et. Expedita sequi atque neque ipsa fuga. Sit dignissimos beatae culpa eum omnis eveniet iusto.
Porro maiores nobis et hic. Omnis voluptatum explicabo nihil adipisci. Accusantium laudantium hic consequatur quia doloremque. Molestias ipsa est incidunt rerum vero quia ea.
Facilis deserunt culpa facere temporibus. Ratione reprehenderit aliquid consequatur omnis et. Magnam labore delectus aspernatur quam magni.
Ipsa accusamus commodi sit natus quaerat qui temporibus. Et ipsum et sed cum eos voluptas. Sint et possimus maiores est voluptatibus sunt nisi et. Corporis et laudantium sed autem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...