The 2024 election is over, and whatever you think of the outcome, things feel pretty uncertain just at the moment.
We have all been holding out for lower interest rates and looking forward to much-anticipated rate cuts by the Fed. The Fed has cut twice, for a total of 75 bps, and is widely expected to cut again in December.
And long-term rates went…up. The ten-year UST is up about 70 bps in the past 90 days, with markets reacting to concerns around inflation and federal deficits. Where rates will go is uncertain, and that uncertainty is wearing on all of us in the multifamily industry.
However, a lot is going right in multifamily.
- Deliveries are at or near their peak and are projected to fall by about half in 2025
- Markets are absorbing new deliveries — some faster than others — but demand is finally greater than supply for the first time in a while
- Vacancy was down slightly last quarter
At AGM Financial, we are still seeing and closing deals as our clients turn to FHA for some certainty. FHA underwriting has been constant, and now it is getting even better, with a proposal to reduce debt coverage from 1.176 to 1.15 for most deals and to 1.11 for some affordable projects. Another proposal, published but still being worked out, would offer incentives in the form of lower coverage requirements for middle-income housing.
The uncertainty will likely last for a while, but FHA financing is still here, with favorable underwriting and plenty of liquidity — a real alternative in uncertain times.
If you have a project that needs financing, we welcome the opportunity to speak with you about it. Please schedule a call.
About AGM Financial Services, Inc. Family-owned with over 30 years of experience, AGM has closed over $10 billion in FHA-insured multifamily project loans nationwide. We underwrite, fund, and service all of our loans. Developers and owners can count on AGM to be accessible, transparent, consistent, and ready to lend. From new construction to substantial rehabilitation to acquisition and refinance — for both market-rate and affordable projects — we can get the deal done. To learn more about AGM, call 800.729.4266 or visit agmfinancial.com.
