Burr & Forman

12.1.2017   |   Articles / Publications

Scotsman Guide: Capitalize on Construction: Declines in Residential Purchases Can Boost Multifamily Construction-Investment Efforts

No one is surprised that interest rates are going up. After hitting all-time lows for an extended period of time, there was only one direction rates could head. At the same time, mortgage rates overall are still very low compared to historical averages.

These days, the most pressing pressure on commercial mortgage brokers and lenders isn’t the concern that interest rates are poised to head upward. Rather, on the commercial end — and particularly for larger projects — the challenge these days is to find some creative alternatives to traditional loans, depending on the type of project and the financing requirements relative to the equity invested. This can be especially true of construction financing.

The housing bust and the recession that followed left an indelible mark on the manner in which the average person or family purchases a single-family home. Gone are the days of no income-verification loans. Regulators now agree that it makes good business sense to know whether the person borrowing money actually has the ability to repay it.

In this environment, commercial mortgage brokers should analyze the impact and role of construction financing as it relates to projects in the multifamily sector and also examine how closing more loans will raise the satisfaction levels of the lenders and borrowers they do business with.

Read the full article, “Capitalize on Construction: Declines in Residential Purchases Can Boost Multifamily Construction-Investment Efforts” written by Peter Vilmos.

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