As of today, overall spreads over the 10-year Treasury are still quite tight! There is no spread for swaps, as the 10-year swap actually equals the 10 Year. CMBS pricing is off of the swap. Here is a summary of spreads for 10 Year pricing and longer:
1. HUD/FHA over the 10 Year prior to MIP: 90 to 100 basis point range which equals 3.30% to 3.40%, fixed for 35 years.
2. Freddie Mac up to 80% LTV: 200 to 250 over 10 Year. Small balance loans under $6,000,000 are subject to favorable pricing depending on rent levels and actual market location bringing rates potentially down to the lower end of the range.
3. Fannie Mae up to 80% LTV: 240 to 270 over 10 Year. Fannie Mae pricing is generally HIGHER than Freddie Mac pricing at this time.
4. Insurance up to 70% LTV: 165 to 200 basis points over 10 Year.
5. CMBS up to 75% LTV: 225 to 275 basis points over 10 Year.
When we gauge the market for you, we evaluate your objectives of the financing. Is it ease of approval? Maximum leverage versus moderate leverage? Location and age of property? Loan term desired? We evaluate all of these variables to tailor the best financing source for you.
Thank you for your time to read this, and please feel free to reach out to us with any questions. We service ALL levels of real estate professionals, from the new investor/developer to a seasoned investor/developer. Have a great week.