This course presents the basics of multifamily underwriting - the players, the risks, the documents, and the programs. This comprehensive course describes the necessary analytical tools and documents needed to underwrite a multifamily loan. Students will learn what multifamily property is, knowledge and skill requirements for a multifamily underwriter, the common types of ownership entities and their corresponding principals, what information is contained in the market analysis and how this information is obtained, how the operating statement is used and how the income and expenses of multifamily properties are evaluated, how to select the appropriate loan program, and various lenders' program requirements and features.

Course Outline:

Unit 1 - Introduction to Multifamily Underwriting

Lesson 1 - Multifamily Basics

• What is Multifamily Real Estate?
• What Makes Multifamily Real Estate Valuable?
• Collateral, Recourse, Nonrecourse and Guarantees

Unit 2 - Multifamily Underwriting Basics

Lesson 1 - Borrower Analysis

• Introduction
• Types of Ownership Entities
• Analyzing the Borrower's Real Estate Experience
• Financial Analysis of the Borrower
• Analyzing the Borrower's Credit History

Lesson 2 - Market Analysis

• Basic Concepts and Content of a Market Analysis
• How the Market Analysis Is Done
• Market Analysis by Project Type
• Key Underwriting Questions to Ask

Lesson 3 - Risk Analysis and Mitigation Strategy

• Risks to Multifamily Properties
• Housing Market Changes
• Other Risk Factors

Lesson 4 - Operating Statements

• Basics of Operating Statements
• Evaluating Income
• Evaluating Trends and Proposals
• Stability of the Multifamily Property
• Determining NOI and Loan Ratios
• Choosing the Correct Loan Size
• Interest Rates

Unit 3 - Multifamily Loan Documents

Lesson 1 - Loan Documents

• Document Categories
• Application Staging
• New Construction/Rehab Loans
• Acquisition/Refinancing Loans

Lesson 2 - Case Studies

• Case Study 1 - Oak Ridge Apartments
• Case Study 2 - Mountain View Apartments

Unit 4 - Multifamily Loan Programs

Lesson 1 - Multifamily Loan Programs

• Program Overviews
• Federal Mortgage Insurance
• Fannie Mae
• Freddie Mac
• Real Estate Mortgage Investment Conduits (REMICs)
• Life Insurance Companies
• Pension Funds

Lesson 2 - Commercial Mortgage-Backed Securities

• Formation of a Trust
• Division of the Pool
• Sources of Loans
• Three Basic Types of Transactions
• Structure of Commercial Mortgage-Backed Securities
• Commercial Servicing Duties and Standards

Course Credit:
Completion of this course earns five points toward MBA's Certified Mortgage Banker (CMB), or Certified Mortgage Technologist (CMT) designations.