Rate trends encourage new strategies for healthcare borrowers.The prospect of still another Federal Reserve rate hike at the end of June produced another bump in long-term Treasury prices earlier in the month and prompted still another cautionary warning from senior housing / healthcare lender Cambridge Realty Capital Companies. Cambridge is one of the nation's leading senior housing / healthcare lenders with more than $1.75 billion in 250 closed transactions since the mid-1990s. Chairman Jeffrey A. Davis said the company continues to urge clients to lock in long-term rates at current levels whenever possible. He points out that HUD Hud (h  d), a pre-Qur'anic prophet of Islam. Hud unsuccessfully exhorted his South Arabian people, the Ad, to worship the One God. rates closely mirror what's happening with 10-year Treasury notes. Conventional loans more typically are keyed to the Prime rate or to the London Interbank in·ter·bank adj. Relating to, involving, or connecting two or more banks: interbank borrowing; an interbank network of automated teller machines. Offer Rate (LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). ) index. In response to Fed monetary policies, Davis points out that the prime rate has moved up to 8 percent from 7.75 percent in May. Long-term rates for 10-year Treasury notes have remained flat, declining from 5.07 to 5.05 in early June. But the three-month LIBOR rate was up from 5.14 in May to 5.27 in June. The thing to notice is that both long-term Treasuries and the LIBOR index are up almost two percentage points from this time last year. And there's nothing to suggest the upside pressure on rates is abating," Davis said. "Potential borrowers need to closely evaluate these trends," he stressed. Cambridge also reports that demand for multi-facility conventional jumbo loans Jumbo Loan Any residential or commercial mortgage with a loan amount exceeding the guidelines of Fannie Mae and Freddie Mac. Notes: Rates tend to be slightly higher on jumbo loans because lenders generally have a higher risk. for the acquisition or refinancing Refinancing An extension and/or increase in amount of existing debt. of independent living retirement apartments and assisted living as·sist·ed living n. A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. facilities is on the rise. "Inquiries have picked up, and we're getting a lot more input and feedback from investors regarding jumbo loans totaling $25 million or more," said Jeffrey A. Davis. Over the past 10 years Cambridge has closed more than 275 senior housing/healthcare loans totaling more than $1.75 billion, he said. "At this time, there's a lot of activity in senior housing. Apparently, interest rate volatility is convincing borrowers that this is a good time to move away from different types of floating rate mortgages." Available nationwide are fixed-rate jumbo programs keyed to U.S. Treasuries U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. plus 1.50 percent to 2.50 percent, and floating rate programs based on LIBOR plus 1.50 percent to 2.50 percent. "Our funding partners for these products are major domestic insurance companies or pension funds. Loans are available for terms of seven to 20 years with amortization between 20 and 30 years," he said. Davis said loan-to-value for the non-recourse jumbo loans ranges up to 80 percent. Conventional underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. procedures apply. |
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