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Closing the Gap in Affordable Housing Development

Colorado Real estate Journal

by Peter Wessel

Over the past several years, market-based rental rates have crept up with construction costs. Not so for affordable rental units, though, because they are capped based on low and moderate incomes that have not risen commensurately. This mismatch has resulted in an increasing gap between the cost of developing a new affordable apartment project and the ability to finance its development.

Fortunately, there are a couple of new tools available to affordable housing developers to close the funding gap. They are not perfect but they can be viable solutions to help develop or preserve affordable properties – so long as you know how to navigate their complexities.

Multifamily Originations are on the Rise

Multifamily Originations are on the Rise

Commercial and multifamily mortgage origination volumes during the second quarter of 2013 rose 36% from the first quarter of 2013 and jumped 7% year-over-year, the Mortgage Bankers Association said. 

“Commercial and multifamily mortgage lending and borrowing continued to grow during the second quarter,” said MBA Vice President of Commercial Real Estate Research Jamie Woodwell.

“The apartment market continues to be the belle of the ball, with multifamily mortgage originations running 31% ahead of last year’s first half total. And after a slow start to the year, lending by life insurance companies surged in the second quarter to record the highest quarterly volume on record for that sector,” added Woodwell. 

When compared to the second quarter of 2013, the 7% overall increase in commercial lending volume was driven by an increase in originations for multifamily properties. The dollar volume of loans for multifamily properties rose 31%, while hotel properties were up only 3%. The dollar volume of loans for retail properties dropped 14%, while health care properties fell 36%. Office and industrial properties remained unchanged year-over-year. 

Continue reading on housingwire.com

Published July 30, 2013 | By Megan Hopkins

2013-08-01T14:21:27+00:00Industry News|
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