Multifamily owners rush to refinance their mortgages

The plunging interest rates have kicked off a multifamily borrowing binge.

This week at a CRE Finance Council conference in New York City, agency lenders reported receiving more than $7 billion loan quote applications last week — double the normal weekly amount, according to Multi Housing News.

“The phone is ringing off the hook, as you might imagine,” Andrew Gnazzo, managing director of multifamily finance at intermediary firm Walker & Dunlop, told conference attendees.

Amanda Nunnink, vice president of investor relations at Freddie Mac, said about 90 percent of the requests are fixed-rate and about two-thirds are refinance applications.

“Lower interest rates will make borrowing costs cheaper for developers so they will have incentive to do more projects,” said Michael Nourmand, president of Nourmand & Associates Realtors. “Real estate is an alternative investment to the stock market so with the current volatility, I think we’ll see more investors allocate their money into the real estate market.”

Even before the drop in interest rates, Greystar CEO Bob Faith said he was “very bullish” on the multifamily sector.

“When you go into a recession, people still have to live somewhere, and so you might not like the price you get but you can always fill up a rental residential and that’s the great thing about the asset class,” Faith said last month.

The frenzy on the commercial side is also being seen in the resi space. Monday was the busiest day for mortgage applications in the 35-year history of Quicken Loans, CEO Jay Farner told Bloomberg. The frenzy for loans has created a bidding war for talent, as lenders look to poach underwriters who can handle the incoming deal frenzy. “If you’re not making $1 million this year as a loan officer, you’re grossly incompetent,” Gold Star Mortgage Financial’s Eric Mitchell told Bloomberg. “I tell them, ‘We’re not working 40 hours a week, kiss your families goodbye.’” [Multi Housing News] — Tina Daunt