A common question being asked in todays financial climate, "Are apartment financing, MultiFamily property refinancing or apartment construction loans still available?" The answer to this question is a resounding YES. I continue see loans funded for apartment purchases, apartment refinances and construction lending. This is awfully good news in a time of a protracted credit crunch; a credit squeeze which has now gone global in it’s scope.

A source close to my company, one with ties to the top counsels of Fannie Mae and Freddie Mac, recently confided that Fannie and Freddie have been making money ONLY in the Apartment and Mobile Home Lending sectors.

The upshot is this: These two venerable institutions of probity are determined to increase liquidity and strengthen apartment lending programs. The Fed needs to hang it’s hat on something, so why not strengthen an already existing stable lending platform to promote future growth in an industry already doing well: Apartments.

This protracted credit squeeze began as a virus. This virus started with the housing industry and contaminated the commercial real estate market along with just about every stock, financial instrument, business man, woman or line of credit in the country. Apartments have been the least impacted the credit crunch, but sales volume has still registered sizeable decline.

What a mess it has become. The chill in the credit markets began in October 2006. By October of 2007, this chill had become a deep freeze.

To understand the steep decline in the commercial real estate industry,

one need only look at the numbers: Total commercial sales volume for October 2008 was barely one-quarter of it’s October 2007 level and just over 20% of the levels it achieved in 2006. Now that is a drop!

The aggregate deal volume and sales volumes for commercial real estate as a whole is down 75%, October 2007 to 2008.

For apartments, the fall off in deal volume has been sharp and steady: The number of properties trading hands has fallen 60% from October 2006 to October 2007 and has fallen another 75% this past 12 months.

There are several explanations for this but perhaps the number one reason is price risk, as measured between the spread of cap rates and the 10-Year Treasuries. In the apartment sector, this spread has more than tripled, (not

Good) to a spread of 263 bps from their narrowest point in July of 2006, when it was 81 bps.

Between 2000 and 2004, the total renter households declined by 1.9 million as home ownership increase from 66.9 percent to 69 percent.

In 2005 this house-hold, rental-living trend began to reverse itself. Since the beginning of 2007,the home ownership rate has fallen by 110 basis points, resulting in 1.5 million additional renter households. This reversal is most pronounced in the younger age segment but it cuts across all age lines. The trend is up for rental-living-units.

In the end, Apartments are holding up well. Financing IS available and more people than ever are in need of rental housing.