a Accepts packages from brokers and correspondents. Call before sending.
b Only accepts packages through approved brokers/correspondents
c Wholesale pricing is available to brokers/correspondents
d Wholesale pricing is only available to correspondents
e Wholesale pricing is available to approved brokers
f Will collect fee for brokers/correspondents
g Par pricing is available to brokers
7 High-rise apartments
8 Historic property
10 Low-income
11 Senior housing
12 Student housing
17 Foreclosure
avoidance loans
(or NOD)
18 Forward
commitments
21 Nonrecourse loans
22 Remodel/renovation
23 Third TDs
LOAN T YPE / PURPOSE
COMPANY NAME
Submission
Criteria 1 2 3 4 5 6 7 8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
DSCR LTV
Max%
Max
$
Min
24 25 26 27 28
24 Fannie Mae DUS
25 Freddie Mac:
Program Plus
26 HUD loans
27 Securitized
mortgage
programs
28 Private money
LOAN CRITERIA
LOAN PROGRAMS
Amounts
display
Seattle Funding Group Ltd.
YY
YYYYY
YYY
YY
250K 3M 65
Y
888-SFG-FUND (734-3863)
a,f
AK CA CO HI ID NV OR UT WA
Direct portfolio lender. Never a prepayment penalty. For California properties, contact the San Diego
office at 858-751-0556. www.sfgfunds.com
2M none 80 1.2
INTERNATIONAL
YY
Outside U.S., minimum loan amount $10M
Union Bank
YY
YYYYYYYYY
YY
400K 5M 75
800-463-0687
CA DC MD OR TX VA WA
Portfolio lender with in-house approval authority
Tell lenders you found them in Scotsman Guide
Criteria
LTV Max Min 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DSCR
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a conventional property can thus hold
little value. Furthermore, most student-housing markets comprise many distinct submarkets. It can be challenging
for an investor to assess and monitor
relatively small and constantly changing submarket dynamics.
When it comes to location, it is common to hear that a property should be
located within a mile of or across the
street from campus. Astute investors
realize such generalizations are meaningless in student housing. University
campuses often sit on hundreds of
acres, so although a property might
technically be across the street from
campus, it may otherwise be poorly
located in relation to classrooms or libraries. Understanding pedestrian and
vehicular flows as well as a property’s
proximity to key points of interest to the
college demographic is essential.
« STUDEN T-HOUSING continued from page 22
simulators and indoor-cycling studios
quickly become passé when the property across the street includes an even
newer amenity.
Operations
Simply put, it is more difficult to op-
erate a student-housing asset than it
is to operate a conventional market-
rate apartment community. Staggered
each other to capture market share by
pre-leasing, which can have brutal con-
sequences. Once one property begins
offering concessions to capture new
tenants, competing properties are es-
sentially forced to respond, risk vacancy
or rely on leasing later in the year.
“Although there are three student-housing
real estate investment trusts that provide
leadership and transparency for the
space, most student housing is, in fact,
Amenities
The old student-housing maxim, “
amenities, amenities, amenities” — while
still true — is beginning to wane. Many
owners have come to realize that, although offering a 250,000-gallon
resort-style pool is alluring to new tenants, having dependable, high-speed
broadband Web access is the key to retaining them.
In an era in which the average tenant
has three Internet-connected devices,
keeping up with bandwidth requirements is logistically challenging and
expensive. It is difficult for a property
to maintain a competitive advantage
when marketing to a fickle, highly impressionable group of tenants. Golf
owned by local groups and built as typical
garden-style multifamily properties.”
conventional market. Although there
are three student-housing real estate
investment trusts that provide leadership and transparency for the space,
most student housing is, in fact, owned
by local groups and built as typical
garden-style multifamily properties.
Relatively few trades and limited public data result in higher cap rates. The
pool of potential student-housing
buyers is much smaller than the pool
for conventional product, so the exit
risk increases.
Furthermore, although Fannie Mae
and Freddie Mac have dedicated student-housing lending programs, they
tend to focus on the best — properties
with strong operating histories in well-located submarkets near campus.
Because most student housing is
located in secondary and tertiary markets, the presence of balance-sheet
lenders is often limited. Life-insurance
companies also are often reluctant to
invest in these small communities. And
despite a few commercial mortgage-backed securities (CMBS) student-housing loans, the CMBS 2.0 story
is clearly stuck in the first chapter at
this point.
leasing throughout the year lets conventional apartment owners mitigate
risk and provides for real-time pricing adjustments as market conditions
change. The student-housing leasing
cycle, by contrast, coincides with the
academic year.
Because demand for the next year is
based on a captive audience and is es-
sentially fixed, properties begin battling
expense in student housing is greater
than that of conventional products.
And with more wear-and-tear in a four-
bedroom and four-bathroom apartment
than in a one-bedroom apartment,
maintenance costs are also greater.
Thin market
The student-housing market is a
small, highly fragmented subset of the
• • •
Student housing requires more home-
work than other asset classes. For ex-
perienced brokers, however, a high
level of specialized product knowl-
edge and due diligence will result in
better yields. Whether the economy
improves, declines or stagnates, the
student-housing market’s insulated
nature likely will keep it attractive on a
risk-adjusted basis. •
