Understanding "Bankruptcy Financing Loans": What California Businesses Really Need to Know

If you've found yourself searching for "bankruptcy financing loans" in California, you're likely facing significant financial challenges. While this term is commonly used, it actually conflates two very different concepts: government financing (which prevent bankruptcy) and specialized financing for businesses already in bankruptcy proceedings.

Understanding this distinction—and knowing your real options—could be the key to your business's survival and recovery.

The Reality Behind "Bankruptcy Financing Loans"

First, let's clear up the confusion. A true "financing" is when a government or large institution prevents a company from failing—think of the 2008 bank rescues. These are extremely rare and reserved for companies whose failure would damage the entire economy.

What most California business owners actually need falls into three categories:

1. Pre-bankruptcy alternatives to avoid filing altogether
2. Debtor-in-Possession (DIP) financing for businesses in Chapter 11
3. Post-bankruptcy recovery loans to rebuild after discharge

Your Lifeline During Chapter 11: DIP Financing

For businesses that have filed for Chapter 11 bankruptcy, Debtor-in-Possession (DIP) financing is the primary tool for maintaining operations. This specialized financing comes with unique advantages:

• "Super-priority" status: DIP loans get paid before most other debts
• Court protection: The bankruptcy court oversees and approves all terms
• Operational continuity: Keeps your business running while you reorganize

However, DIP financing isn't easy to obtain. Lenders require a credible reorganization plan, substantial collateral (often a blanket lien on all assets), and sufficient cash flow to service the loan. Interest rates in 2025 have exceeded 15% in some cases, with total costs approaching 20% when fees are included.

Alternatives to Bankruptcy: Act Before It's Too Late

Before considering bankruptcy, California businesses have several options:

Federal Programs:

• SBA 7(a) and 504 loans for working capital and real estate
• The new SBA Working Capital Pilot program (up to $5 million)
• USDA programs for rural businesses

State Programs:

• California Capital Access Program (CalCAP) - provides loan loss reserves to encourage bank lending
• Local initiatives like San Francisco's Downtown Vibrancy Fund

Private Solutions:

• Debt consolidation loans
• Asset-based lending
• Accounts receivable financing
• Equipment refinancing

The key is acting quickly. These options become limited once bankruptcy is filed.

Rebuilding After Bankruptcy: The Path Forward

A bankruptcy discharge offers a fresh start, but accessing capital remains challenging. Your credit score may drop by 200 points, and the bankruptcy stays on your record for up to 10 years. However, recovery is possible:

1. Immediately post-discharge: Secured credit cards and asset-based loans
2. 1-2 years later: FHA loans and co-signed financing become available
3. 3-5 years later: Traditional lending options gradually reopen

Hard money lenders and alternative financing companies often fill this gap, providing capital based on assets rather than credit scores.

Why Timing and Expertise Matter

The financial distress landscape in California is becoming increasingly complex. Recent 2025 updates show:

1. Governor Newsom's budget cuts are reducing some state aid programs
2. The SBA has introduced new rules and stricter documentation requirements
3. DIP financing costs are at historic highs
4. The EIDL program has closed to new applicants

This evolving environment makes professional guidance more critical than ever.

How Capital Direct Funding Can Help

At Capital Direct Funding, we understand that "bankruptcy financing loan" searches represent real businesses in crisis. We specialize in providing tailored financial solutions for companies at every stage of distress:

• Pre-bankruptcy: Alternative financing to help you avoid filing
• During bankruptcy: Guidance on DIP financing and operational funding
• Post-bankruptcy: Asset-based lending and recovery capital

Our team has extensive experience with California's distressed business landscape. We know that behind every loan application is a business owner fighting to save their company, their employees' jobs, and their American dream.

Take Action Today

Don't wait until your options disappear. Whether you're trying to avoid bankruptcy, currently in Chapter 11, or rebuilding after discharge, the right financing partner makes all the difference.

Your business crisis doesn't have to become a business ending. With the right knowledge, timing, and financial partner, you can navigate through distress and emerge stronger. Let Capital Direct Funding be your guide through these challenging waters.

Navigating Cross-Collateralization and Blanket Loans in California's 2025 Real Estate Market

California's real estate market presents a unique challenge for investors in 2025. With home prices sitting at more than double the national average and mortgage rates hovering between 6-7%, traditional financing methods are becoming increasingly restrictive.

For seasoned real estate investors looking to expand or consolidate their portfolios, cross-collateralization and blanket loans have emerged as powerful strategic tools—but they come with both significant opportunities and risks that demand expert navigation

Understanding the Fundamentals

Blanket loans allow investors to secure multiple properties under a single mortgage, streamlining portfolio management into one monthly payment and one set of loan terms. This consolidation can save thousands in closing costs compared to securing individual loans for each property.

Cross-collateralization takes this concept further, potentially using a single property to secure multiple loans or linking various assets to different debts with the same lender. While this can unlock greater borrowing capacity and better terms, it also means that a default on one obligation could put your entire portfolio at risk.

The New Regulatory Landscape

Two critical pieces of legislation are reshaping how these financing tools operate in California: Senate Bill 1286 (effective July 1, 2025) extends consumer-style debt collection protections to commercial debts under $500,000 when a natural person is involved—including those who provide personal guarantees for business loans. This fundamentally changes how lenders must approach collection practices.

Assembly Bill 130 (effective June 30, 2025) imposes new standards on mortgage servicers, particularly for subordinate mortgages commonly used in cross-collateralization arrangements. These new requirements create additional compliance obligations that both lenders and borrowers must understand.

Strategic Benefits for Qualified Investors

Despite the complexities, these financing tools offer compelling advantages:

• Simplified Management: One payment, one set of terms, one point of contact
• Cost Efficiency: Dramatically reduced closing costs and administrative fees
• Increased Leverage: Pool equity across properties for larger loans and better rates
• Portfolio Flexibility: Release clauses allow individual property sales without triggering full loan repayment
• Refinancing Power: Consolidate multiple high-rate loans into a single, more manageable mortgage

The Critical Importance of Expert Guidance

The convergence of market pressures and regulatory changes makes professional guidance essential. These loans typically require:

• Down payments of 25-50% of combined property values
• Exceptional credit scores and proven track records
• Sophisticated understanding of dragnet clauses and release provisions
• Clear exit strategies, especially for balloon payment structures

California courts have historically viewed dragnet clauses with skepticism, requiring clear evidence of borrower understanding and consent. Combined with the new legislative protections, this creates a complex environment where expertise isn't just helpful—it's essential.

Why Capital Direct Funding?

At Capital Direct Funding, we specialize in structuring cross-collateralization and blanket loan solutions that work within California's evolving regulatory framework. Our team understands both the financial mechanics and legal nuances of these complex transactions.

We work exclusively with qualified investors who have the financial capacity and experience to leverage these powerful tools effectively. Our expertise helps you:

• Navigate new compliance requirements under SB 1286 and AB 130
• Structure deals that maximize benefits while minimizing risks
• Ensure proper documentation to protect your interests
• Develop strategic exit plans for balloon payments
• Optimize your portfolio's financing structure

Take Action Today

In today's challenging market, the difference between growth and stagnation often comes down to creative financing strategies executed with precision. Cross-collateralization and blanket loans aren't for everyone—they're sophisticated tools for serious investors ready to scale strategically.

If you're managing multiple properties and feeling the pressure of high rates and complex administration, it's time to explore whether consolidation through these financing tools makes sense for your portfolio.

Ready to discuss your portfolio's potential?

Contact Capital Direct Funding today for a confidential consultation about your cross-collateralization and blanket loan options.

California Business Buyouts in 2025: Why Smart Financing Can Save Your Deal

Every California business buyout faces the same critical challenge: securing enough capital, quickly enough, to meet legal deadlines without destroying the business.

Whether you're buying out a partner or navigating a divorce, the stakes couldn't be higher. One wrong move can trigger massive tax bills, violate statutory requirements, or drain your working capital. At Capital Direct Funding, we've closed hundreds of these deals. Here's what you need to know—and why timing is everything.

The $15 Million Game Changer

The new "One Big Beautiful Bill Act" (OBBBA) just transformed buyout economics:

• Capital gains exclusions up to 100% for qualifying businesses
• Increased QSBS cap from $10M to $15M
• Permanent 20% pass-through deduction

Translation: Sellers can now save millions in taxes—making deals more negotiable and buyouts more affordable. But only if you structure financing correctly.

Two Buyouts, Two Different Nightmares

Partnership Buyouts: The 120-Day Clock

Under California's RUPA, you have just 120 days after a partner's written demand to pay their "fair value"—without minority or marketability discounts. Most businesses don't have that cash sitting around.

The Solution: Bridge financing that meets statutory deadlines while you arrange long-term capital.

Divorce Buyouts: The 50/50 Trap

California's community property laws mean your spouse owns half your business. Forensic accountants will add back every personal expense, potentially doubling your buyout cost.

The Solution: Structured financing that preserves operations while meeting court-ordered equalization payments.

Why Traditional Lenders Fail at Buyouts

Banks see "partnership dispute" or "divorce" and run. They don't understand:

• California's unique statutory requirements
• The urgency of court deadlines
• How to value businesses mid-transition
• The new tax advantages you should be leveraging

We do. Capital Direct Funding specializes exclusively in complex California business transitions.

The 2027 Advantage You Should Plan For Now

California's new Civil Code § 2951 (effective 2027) will revolutionize divorce buyouts by allowing loan assumptions. Smart business owners are already structuring their commercial loans with similar provisions. We can help you get ahead of this curve.

The Hidden Costs of Waiting

Every day without financing costs you:

• Legal fees from extended negotiations
• Lost business from partnership uncertainty
• Tax advantages under expiring provisions
• Competitive position while you're distracted

3 Reasons Deals Die (And How We Prevent Them)

1. "The valuation was contested" -We fund based on agreed valuations and adjust terms if needed

2. "We missed the statutory deadline" -Our 48-hour approvals ensure you never miss critical dates

3. "The payments killed our cash flow"- We structure terms around your business cycle, not arbitrary bank requirements

The Bottom Line

California buyouts are legally complex, time-sensitive, and expensive. But with the right financing partner, they're also opportunities to:

• Consolidate ownership
• Eliminate conflicts
• Position for growth
• Maximize new tax benefits

The question isn't whether you'll need buyout financing—it's whether you'll be ready when you do.

The Clock Is Ticking. We're Ready to Fund.

Every day matters in a buyout. Don't let perfect be the enemy of done. Call now and let's solve this together.

California Bridge Loans: Close in Days, Not Months (Perfect for 1031 Exchanges)

That perfect property just hit the market. Your 1031 exchange deadline is approaching. The auction ends tomorrow. While banks need 45 days, you need funding NOW. Welcome to bridge loans – your 5-day solution to California's hottest deals.

Why Speed Wins in California Real Estate

The Hard Truth:

• Cash offers win 92% of bidding wars
• Hot properties gone in 48 hours
• 1031 exchanges fail 30% of the time due to slow financing
• Banks take 30-45 days minimum
• Every day of delay costs you money

The Solution: Bridge loans that close in 5-7 days.

Bridge Loans: Your Cash Offer Advantage

Make cash offers. Win deals. Refinance later.

Perfect For:

• 1031 exchange deadlines (never miss your 45/180-day window)
• Competing against cash buyers
• Auction and foreclosure purchases
• Buying before your current home sells
• Time-sensitive investment opportunities

1031 Exchange Running Out of Time?

With California capital gains taxes up to 37%, a failed exchange costs hundreds of thousands. Don't let slow financing blow your deadline.

Our 1031 Fast Track:

• Pre-approval before you sell
• 5-day funding after property identified
• Save massive tax bills
• Bridge to permanent financing

Capital Direct Funding: California's Speed Leader

✓ 5-7 Day Closings – Fastest in California

✓ Up to 75% LTV – Strong leverage

✓ 24-Hour Pre-Approval – Know your power immediately

✓ No Income Verification – Asset-based lending

✓ 6-24 Month Terms – Flexible exit strategies

✓ 1031 Exchange Experts – We know the deadlines

Stop Losing Deals to Cash Buyers

While you're waiting for bank approval, someone else is signing contracts. In California's market, speed isn't everything – it's the ONLY thing.

Your Deal Is Waiting. So Is Your Competition.

Every hour matters. Every day costs money. Every delay risks your deal.

When speed matters, we deliver.

Build California's Future: Ground-Up Construction Loans for Visionary Developers (2025)

Empty lots. Tear-down properties. Underutilized land. While others see vacant space, you see tomorrow's landmarks. In 2025, California's housing shortage has created the perfect environment for ground-up construction – and we have the financing to make your vision reality.

California's Construction Boom: Why Builders Are Winning Big in 2025

Market Reality Check:

• California needs 2.5 million new homes by 2030
• New construction sells for 25-40% premiums over existing homes
• SB-9 and SB-10 allow up to 10 units on single-family lots
• Construction costs stabilized after 2024's volatility
• Buyer demand for new homes at all-time highs

The math is simple: Massive demand + Limited supply + Strategic financing = Developer profits.

What Are Ground-Up Construction Loans?

Forget traditional bank bureaucracy. Our construction loans are built for speed and flexibility:

We Fund:

• Single-family spec homes
• Multi-unit residential projects
• Mixed-use developments
• Townhome communities
• Small subdivision projects
• Luxury custom homes
• Affordable housing projects
• ADU and SB-9 lot splits

From Dirt to Dollars: We cover land acquisition, permits, site work, construction, and carrying costs – everything you need from foundation to final sale.

Hot California Construction Markets

Los Angeles County: $1.2M average new home price | 45-day average DOM

Orange County: Luxury builds selling $500+ per sq ft | Instant buyer demand

San Diego: Military housing demand driving 30% annual appreciation

Bay Area: Tech recovery fueling $2M+ new construction presales

Sacramento: Affordable alternative with 60% profit margins on spec builds

Inland Empire: Land costs 70% below coastal = maximum ROI potential

2025's Hottest Construction Opportunities

The "Missing Middle" Goldmine: 2-10 unit projects in established neighborhoods

ADU Packages: Build multiple ADUs simultaneously for economies of scale

Lot Splits: One property becomes 2-4 income streams

Sustainable Builds: Net-zero homes commanding 30% premiums

Workforce Housing: State incentives + guaranteed demand = sure profits

Critical Market Timing Alert

Why Build NOW:

• Lumber prices down 35% from 2024 peaks
• Skilled labor more available than last 3 years
• Spring 2025 buyers already shopping
• Interest rates stabilized = confident buyers
• New CA building incentives expire December 2025

Next 90 Days = Prime Building Window

Your Construction Success Formula

1. Find the Land – We'll help analyze deals
2. Get Approved – 48-hour turnaround
3. Break Ground – Fast funding to start
4. Build Smart – Draw funds as needed
5. Sell Big – Capture maximum profits

Stop Dreaming. Start Building.

Every vacant lot you pass could be your next success story. Every tear-down could be tomorrow's profit. But only if you have the right financing partner. Capital Direct Funding doesn't just fund construction – we fuel California's growth.

Don't Wait – Prime building lots are being grabbed daily. The house you could build tomorrow is the profit you'll miss today.

California's Distressed Property Goldmine: Quick Financing for Maximum Returns in 2025

Smart investors know: California's distressed properties are today's best-kept secret. With commercial properties down 40-60% from peaks and residential foreclosures creating rare opportunities, the time to strike is NOW.

Why 2025 Is Your Year for Distressed Property Investing

The Numbers Don't Lie:

• Distressed properties selling 30-50% below market value
• Post-renovation returns averaging 70-120%
• Fix-and-flip profits averaging $85,000 per deal
• Office-to-residential conversions now 40% faster thanks to new CA legislation

California's perfect storm: Rising distressed inventory + Strong rental demand + Strategic financing = Your opportunity.

What We Finance: Turn Problems Into Profits

Distressed Property Loans for:

• Foreclosures and REO properties
• Abandoned commercial buildings
• Properties needing major repairs
• Troubled assets with title issues

Value-Add Financing covers:

• Complete renovations
• Commercial-to-residential conversions
• Multifamily upgrades
• Strategic improvements that double property value

Hot California Markets Right Now

Los Angeles: Downtown office buildings at 60% discount – perfect for conversion

Bay Area: Tech bust = investor boom. Oakland properties offering 95% ROI

San Diego: Coastal distressed properties with 40-60% upside

Inland Empire: Industrial conversions and portfolios at unbeatable prices

Why Capital Direct Funding?

Traditional banks see problems. We see potential.

✓ 24-48 Hour Approvals – Move fast on hot deals

✓ Up to 90% Purchase + 100% Renovation – Minimize cash needed

✓ Asset-Based Lending – We care about the deal, not just credit

✓ 6-24 Month Terms – Flexible to match your strategy

✓ No Prepayment Penalties – Exit when you're ready

The Clock Is Ticking

Every day you wait, another investor grabs YOUR deal. California's distressed inventory is moving FAST, and the best opportunities disappear in days, not weeks.

Get Your Financing Today

Stop watching opportunities pass by. Whether you've found a property or need help analyzing deals, Capital Direct Funding has the speed and expertise to make it happen.

Don't let traditional lenders kill your deals. When banks say no, we say YES.

Unlock Your Property's Hidden Potential: The Ultimate Guide to ADU Construction Loans in California (2025)

Picture this: Your California property has untapped potential worth hundreds of thousands of dollars. It's sitting right in your backyard, above your garage, or in that unused corner of your lot. Welcome to the ADU revolution that's transforming California properties – and we're here to show you exactly how to finance it.

Why California Homeowners Are Going All-In on ADUs in 2025

The numbers don't lie. California's housing crisis has created an unprecedented opportunity for property owners. With median rents in Los Angeles hitting $3,200/month and San Francisco exceeding $3,800/month, your ADU isn't just an addition – it's a goldmine waiting to happen.

Breaking ADU News That Affects Your Wallet

January 2025 Update: California just streamlined ADU approvals even further! Senate Bill 1211 now requires cities to approve ADU permits within 30 days (down from 60), making your construction timeline faster and more predictable than ever.

Game-Changing Statistics for 2025:

• ADUs in California are generating average monthly rental income of $2,500-$4,000
• Property values increase by an average of 35% after ADU completion
• ROI on ADU investments now averaging 15-20% annually in major CA metros
• Construction costs have stabilized after 2024's volatility

What Are ADU Construction Loans? Your Fast-Track to

Property Wealth

Think traditional construction loans are your only option? Think again. ADU construction loans are specifically designed for California's unique market, offering:

• Higher loan-to-value ratios than conventional construction loans
• Interest-only payments during construction
• No prepayment penalties when you refinance after completion
• Flexible qualification criteria that consider future rental income

The California ADU Boom: Why Location Matters More

Than Ever

Los Angeles County

LA just allocated $150 million in ADU incentive programs for 2025. Homeowners in qualifying neighborhoods can receive up to $40,000 in grants – but only if they can finance the rest. Average ADU construction cost: $150,000-$250,000. Average time to positive cash flow: 4-6 years.

San Francisco Bay Area

Tech workers returning to offices are creating massive rental demand. Peninsula cities are seeing $4,500+/month for 1-bedroom ADUs. New zoning laws allow up to 800 sq ft ADUs without additional parking requirements.

San Diego County

With the biotech boom continuing, ADUs near research centers are commanding premium rents. The city's new "ADU Bonus Program" offers expedited permitting for energy-efficient units.

Sacramento & Central Valley

The affordable alternative to coastal California is experiencing 40% year-over-year growth in ADU applications. Construction costs here are 30% lower than coastal regions, making ROI even more attractive.

2025's Hottest ADU Trends Shaping the Market

Smart ADUs

Tech-integrated ADUs with smart home features are commanding 15-20% higher rents. Financing these upgrades through your construction loan maximizes ROI.

Eco-Friendly Designs

Solar-ready ADUs qualify for additional California tax credits worth up to $15,000. Green construction can reduce operating costs by 40%.

Prefab Revolution

Prefabricated ADUs are cutting construction time by 50%. With faster builds, you start earning rental income months sooner.

The Clock Is Ticking: Why 2025 Is THE Year for Your ADU

• Interest rates have stabilized but may rise later this year
• Construction costs are temporarily steady after years of increases
• California's housing shortage continues to drive rental demand higher
• New state incentives may not last beyond 2025

Ready to Transform Your Property Into a Profit Center?

Don't let another month of potential rental income slip away. The ADU revolution is happening NOW, and Capital Direct Funding is here to make your vision a reality.

Don't wait for tomorrow's opportunities – seize today's.

🏠

Don't wait for tomorrow's opportunities – seize today's. 🏠

Navigating California's Probate Process: How Estate Loans Can Be Your Financial Bridge in 2025

If you're reading this, chances are you're dealing with one of life's most challenging moments – settling an estate while waiting for probate to conclude. In California, where probate can stretch anywhere from 9 to 18 months (and sometimes longer), the financial pressure can feel overwhelming. The good news? You don't have to wait. Let's explore how probate and estate loans are transforming the way California families handle inheritance matters in 2025.

The California Probate Reality: Why Timing Matters

California's probate courts are experiencing unprecedented backlogs in 2025. Recent data shows that Los Angeles County alone has seen a 15% increase in probate filings compared to last year, with San Francisco and San Diego counties following similar trends. For beneficiaries, this means one thing: longer wait times for your rightful inheritance.

Meanwhile, life doesn't pause. Property taxes on inherited real estate in California have surged by an average of 8% this year. Mortgage payments, maintenance costs, and estate debts continue to accumulate. This is where probate loans become not just helpful, but essential.

What Exactly Are Probate & Estate Loans?

Think of a probate loan as a financial bridge – it connects you from today's pressing needs to tomorrow's inheritance. These specialized loans provide immediate cash advances against your pending inheritance, allowing you to:

• Pay off estate debts and taxes without depleting personal savings
• Maintain inherited properties in California's competitive real estate market
• Cover legal and administrative fees during the probate process
• Access funds for personal emergencies without waiting months or years

California Market Update: Why 2025 Is Different

Rising Property Values Create New Opportunities

California real estate continues its upward trajectory, with median home prices reaching new heights in major metropolitan areas. For estate beneficiaries, this means inherited properties are more valuable than ever – but also more expensive to maintain during probate.

Interest Rate Shifts

With federal interest rates stabilizing in 2025, probate loan terms have become increasingly favorable. Many California beneficiaries are discovering that the cost of a probate loan is minimal compared to the opportunity cost of waiting for probate to conclude.

Legislative Changes

California's recent probate reform initiatives, including expedited processes for smaller estates, have created new opportunities for strategic financial planning during estate settlement.

Why California Beneficiaries Choose Capital Direct Funding

At Capital Direct Funding, we understand that every estate situation is unique. That's why we've tailored our probate loan solutions specifically for California's diverse inheritance landscape. Here's what sets us apart:

• Local Expertise: We know California probate law inside and out
• Fast Approval: Funding often available within 5-7 business days
• No Credit Checks: Approval based on estate value, not personal credit
• Flexible Terms: Customized solutions for estates of all sizes
• Transparent Pricing: No hidden fees or surprise charges

Is a Probate Loan Right for You?

Consider these questions:

1. Are you facing immediate financial obligations related to the estate?
2. Is the probate process taking longer than expected?
3. Would accessing funds now help you preserve or enhance the estate's value?
4. Are you missing investment or business opportunities while waiting for your inheritance?

If you answered yes to any of these, it's time to explore your options.

Take the Next Step Today

Don't let probate delays derail your financial stability or force you to make difficult sacrifices. The team at Capital Direct Funding is here to help you navigate this challenging time with confidence and clarity.

Ready to learn more about how a probate loan can work for your situation?

Contact Capital Direct Funding Today!

Los Angeles Homeowners: Stop Foreclosure Now with Capital Direct Funding

The LA Reality Check

Los Angeles homeowners are facing a harsh reality. In 2025, 782 foreclosure starts hit LA County in May alone - making it the 4th highest metro area in the nation for foreclosures. With mortgage rates hovering at 6.74% and home prices still elevated, many Angelenos are caught in an impossible squeeze.

If you're behind on payments, you're not alone. But here's what you need to know: time is your enemy, and speed is your friend.

Why Los Angeles Is Different

The LA market is unique - and that works in your favor:

• Sky-high equity: Most LA homeowners are sitting on massive equity from years of appreciation
• Average home value: Still over $900,000 in many neighborhoods
• Your advantage: That equity is your lifeline to a bailout loan

According to recent forecasts, mortgage rates are expected to average 6.4% in the second half of 2025, but you can't wait for rates to drop when foreclosure is knocking.

Enter Capital Direct Funding: Your Local Foreclosure

Solution

While banks slam doors and traditional lenders require perfect credit, Capital Direct Funding specializes in one thing: saving Los Angeles homes from foreclosure.

What Makes Capital Direct Funding Different:

1. Lightning-Fast Approval - Decisions in 24-48 hours, not weeks
2. LA Market Experts - We know every neighborhood from Beverly Hills to Boyle Heights
3. No Credit Score Requirements - It's about your equity, not your FICO
4. Close in Days - Stop the auction before it's too late
5. Flexible Terms - 12-36 month programs to get you back on track

The Numbers That Matter

Here's the cold truth about foreclosure bailout loans:

Traditional Route:

• Banks require 700+ credit scores
• 30-60 day processing (you don't have that time)
• Denial rate: 65% for distressed borrowers

Capital Direct Funding Route:

• Minimum 25-30% equity in your property
• Funding in 3-10 business days
• Approval based on property value, not credit history

Your 72-Hour Action Plan

Day 1: Stop the Bleeding

1. Call Capital Direct Funding at (626) 796-1680 for immediate assessment
2. Gather your mortgage statements and foreclosure notices
3. Calculate your home's current value (we can help)

Day 2: Get Your Offer

1. Receive your bailout loan terms
2. Review your exit strategy options
3. No obligation, no upfront fees

Day 3: Save Your Home

1. Accept terms and start documentation
2. Stop foreclosure proceedings
3. Breathe again

The Hard Truth About Waiting

Statistics show that about 25% of borrowers who take out foreclosure bailout loans end up re-defaulting within two years - but that's usually because they wait too long or choose the wrong lender.

With Capital Direct Funding's local expertise and realistic terms, our clients have a much higher success rate because we structure loans you can actually handle.

Act Now - LA's Market Won't Wait

With home sales turnover at once every 22 years in LA, losing your home means you might never get back into this market.

Remember: Every day you wait, you lose negotiating power. The auction date doesn't care about your situation. But we do.

Stop reading. Start calling. Save your home.

Hudson Pacific Secures $475M in CMBS Financing for West Coast Office Portfolio

Hudson Pacific Properties has secured a $475 million commercial mortgage-backed securities (CMBS) loan, supported by a six-building office portfolio spanning key West Coast markets. The real estate investment trust (REIT) was represented by Gibson, Dunn & Crutcher LLP in the transaction, which was announced Monday.

The financing will primarily be used to refinance existing debt, including a $168 million loan tied to the REIT’s Element LA office campus in Los Angeles. According to Hudson Pacific, the funding will also go toward reducing outstanding balances on its credit facility.

“This transaction delivers close to half a billion dollars in gross proceeds, allowing us to fully retire the Element LA loan and reduce our credit facility obligations,” said Harout Diramerian, Chief Financial Officer at Hudson Pacific.

“Coupled with recent and anticipated property sales, this strengthens our liquidity and positions us to more effectively address upcoming debt maturities.”

Portfolio Overview: Strategic Assets Across Major Tech Hubs

The loan is secured by six assets located in California and Washington, reflecting a diversified collection of properties across the REIT’s core markets. These include:

• Los Angeles:

  • 11601 Wilshire Blvd. – A 25-story high-rise that serves as the company’s corporate headquarters.

  • Element LA – A 12-acre creative office campus, home to Riot Games.

• Seattle:

  • 450 Alaskan Way – A recently completed, eight-story office development.

  • 5th & Bell – A six-floor property anchored by Amazon.

• San Francisco:

  • 275 Brannan Street – A fully renovated, three-story building in the SoMa district.

• San Jose:

  • 1740 Technology Drive – An approximately 216,000-square-foot property in the city’s tech corridor.

Loan Terms and Strategic Outlook

The CMBS loan features an initial two-year term, with the option to extend for three additional one-year periods, providing Hudson Pacific with built-in flexibility as it continues to realign its balance sheet.

A spokesperson for Hudson Pacific declined to offer additional details beyond the company’s public statement.

Source: https://www.law360.com/articles/2317923/gibson-dunn-pilots-hudson-pacific-s-475m-office-financing

Tech Industry Fuels San Francisco’s Strongest Office Leasing Quarter in a Decade

San Francisco's office market is showing renewed strength, posting its highest leasing activity in ten years as tech companies lead the charge in securing space. According to a recent Savills report, the city saw 3.4 million square feet of office leases signed in Q1 2025 — a clear sign that momentum is building in the post-pandemic commercial real estate recovery.

Leasing Activity Rises as Big Tech Returns to the Office

Much of the leasing surge was driven by major tech tenants. Google played a prominent role, finalizing two substantial deals:

• 430,000-square-foot renewal and expansion at 345 Spear Street

• 274,000-square-foot renewal at 215 Fremont Street

Other key transactions in the quarter included:

• JPMorgan Chase renewing and expanding into 280,000 square feet at 580 Mission Street

• Lyft, which renewed 163,000 square feet at 185 Berry Street

• Databricks, which signed a lease for 150,000 square feet at 1 Sansome Street

These five leases alone account for a significant portion of total activity, reflecting growing corporate confidence in a return to the office — particularly in high-quality buildings.

Availability Drops Amid Steady Demand

The increase in leasing has also impacted vacancy levels. The total availability rate dropped by 100 basis points, falling to 35.6% in the first quarter, as more tenants solidify long-term space commitments.

The Financial District remains San Francisco’s most expensive submarket, with average asking rents hovering at:

• $70.17 per square foot in the north

• $72.17 per square foot in the south

Tenants continue to favor Class A buildings in premium locations, with flight-to-quality trends shaping demand.

Office Market Still Faces Financial Pressures

Despite growing lease activity, the market isn't out of the woods. High interest rates continue to strain property owners, leading to distressed asset sales and lender involvement.

One example is the KPMG Building at 55 Second Street, a 25-story, 380,000-square-foot tower. Newmark has been enlisted to market a $187.5 million loan backed by the property. With an anticipated sale price in the $300–$400 per square foot range, the loan is estimated to be valued at approximately $140 million.

The loan, originated by Canada Life Assurance in 2019, matures in October 2026—shortly after anchor tenant KPMG plans to vacate its 140,000-square-foot lease and relocate to 505 Howard Street.

The building's owner, Paramount Group, has already written down its investment in the property to zero, having purchased a 44% stake for $402 million in 2019. Paramount has also written off two additional assets acquired that year:

• Market Center, a 745,000-square-foot property bought for $722 million

• 111 Sutter, a 293,000-square-foot asset purchased for $227 million

Business Leaders Signal Optimism for Office Expansion

A recent KPMG survey of 100 San Francisco-based companies — each generating over $50 million in annual revenue — offers a promising outlook for office demand.

• 75% of executives said they plan to increase their office footprint within the next 12 to 18 months

• Nearly 80% aim to have employees back in the office more regularly

• 66% anticipate headcount growth this year

The findings suggest that many businesses are doubling down on in-person collaboration, even as the commercial office sector continues to navigate structural shifts.

Source: https://www.globest.com/2025/04/09/tech-deals-lead-san-francisco-office-leasing-to-10-year-high/

3650 Capital Raises $215 Million to Expand Commercial Real Estate Lending Strategies

Commercial real estate investment firm 3650 Capital has secured $215 million from institutional investors to scale its diversified CRE lending strategies. The capital was raised from long-time partners Mubadala Investment Company and the California State Teachers’ Retirement System (CalSTRS), two major players in global and domestic institutional investment.

Boosting CRE Lending Through Three Key Financing Strategies 3650 Capital plans to deploy the newly raised capital across its core commercial real estate financing platforms, which include:

1. Long-Term, Fixed-Rate Loans for Core Assets The firm will continue providing fixed-rate commercial real estate loans targeting stabilized, income-producing properties with strong fundamentals.

2. Transitional and Bridge Loan Financing 3650 Capital’s bridge loan and value-add financing solutions will serve borrowers repositioning or upgrading CRE assets.

3. Special Situations and Opportunistic Lending A portion of CalSTRS' capital will support the firm's special situations strategy, which focuses on distressed real estate debt, recapitalizations, and equity investments in transitional assets.

These strategies allow 3650 Capital to remain agile in a shifting real estate market, providing both short- and long-term capital solutions across the U.S. commercial property landscape.

About 3650 Capital Founded in 2018, 3650 Capital is a real estate lending and investment platform known for its relationship-driven underwriting, portfolio management expertise, and long-duration loan offerings. The firm manages billions in assets across the U.S. and has emerged as a key lender in today’s dynamic CRE environment.

Source: https://www.globest.com/2025/03/27/cre-lender-raises-215m-to-deploy-across-financing-strategies/

How do I find a good commercial property to invest in?

Commercial real estate investing can be a lucrative and rewarding way to diversify your portfolio and generate passive income. However, finding a good commercial property to invest in is not as easy as it sounds. There are many factors to consider, such as location, property type, market conditions, financing options, tenant demand, and potential returns.

In this blog post, we will share some tips and steps on how to find a good commercial property to invest in. We will also cover some common mistakes to avoid and some tools and resources to help you along the way.

Determine your investment goals and strategy

Before you start looking for properties, you should have a clear idea of what you want to achieve with your investment and how you plan to do it. For example, are you looking for cash flow or capital appreciation? Are you interested in a specific property type, such as office, retail, industrial, or multifamily? Are you willing to take on more risk or prefer a more stable investment?

Having a clear vision of your investment goals and strategy will help you narrow down your options and focus on the properties that match your criteria. You should also consider your budget, time horizon, risk tolerance, and exit plan.

Some of the common investment strategies for commercial real estate are:

• Buy and hold: This strategy involves buying a property and holding it for a long period of time, usually more than five years. The main goal is to generate steady cash flow from rents and benefit from appreciation over time. This strategy is suitable for investors who have a long-term perspective and can afford to tie up their capital for a while.

• Fix and flip: This strategy involves buying a property that needs renovation or improvement, fixing it up, and selling it for a profit in a short period of time, usually less than a year. The main goal is to capitalize on the value-added potential of the property and take advantage of favorable market conditions. This strategy is suitable for investors who have access to financing, contractors, and buyers, and can manage the risks and costs involved.

• Value-add: This strategy involves buying a property that is underperforming or undervalued, making some improvements or changes to increase its income or value, and either holding it for cash flow or selling it for a profit. The main goal is to create value through active management and optimization of the property. This strategy is suitable for investors who have experience in commercial real estate, can identify opportunities for improvement, and can execute the plan effectively.

Do your market research

Once you have an idea of what kind of property you are looking for, you should research the market conditions and trends in the area where you want to invest. You should look at factors such as supply and demand, vacancy rates, rental rates, occupancy rates, absorption rates, cap rates, and price trends. You should also analyze the economic and demographic factors that affect the demand for commercial real estate in the area, such as population growth, income levels, employment growth, business activity, infrastructure development, and consumer spending.

Doing your market research will help you identify the best locations and submarkets to invest in and avoid overpaying or investing in a declining market. You can use various sources of data and information to conduct your market research, such as:

• Online platforms: There are many online platforms that provide data and insights on commercial real estate markets, such as LoopNet , CoStar , CREXi , Reonomy , Real Capital Analytics , CBRE , JLL , Cushman & Wakefield , etc. You can use these platforms to search for properties, compare prices, analyze trends, and access reports.

• Brokers and agents: Brokers and agents are professionals who specialize in commercial real estate transactions. They can help you find properties, negotiate deals, provide market knowledge, and connect you with other professionals. You can find brokers and agents through online directories, referrals, or networking events.

• Local sources: Local sources are people or organizations that have firsthand knowledge or experience in the local commercial real estate market. They can include property owners, tenants, managers, developers, investors, appraisers, inspectors, lawyers, accountants, etc. You can find local sources through word-of-mouth, online forums, social media, or industry associations.

Find potential properties

After you have done your market research, you can start looking for potential properties that meet your investment goals and strategy. You can use various sources to find commercial properties for sale or lease, such as:

• Online platforms: As mentioned above, online platforms are useful tools to search for properties based on various criteria, such as location, property type, size, price, cap rate, etc. You can also filter by availability, condition, tenancy, and other features. Some of the online platforms also offer alerts, notifications, and analytics to help you stay updated on the market.

• Brokers and agents: Brokers and agents can also help you find properties that match your criteria and budget. They can leverage their network, database, and expertise to source deals that may not be listed online or publicly. They can also arrange property tours, provide due diligence materials, and facilitate the transaction process.

• Direct marketing: Direct marketing is a strategy that involves reaching out to property owners or sellers directly and expressing your interest in buying their property. You can use various methods to contact them, such as phone calls, emails, letters, or postcards. You can also use online tools to find their contact information, such as Reonomy , PropertyRadar , or Skip Genie . Direct marketing can help you find off-market deals that have less competition and more room for negotiation.

Analyze the properties

Once you have a list of potential properties, you should analyze them in detail and compare them based on their financial performance and potential returns. You should use various tools and methods to evaluate the properties, such as:

• Income statements: Income statements are documents that show the income and expenses of a property over a period of time, usually a year. They can help you calculate the net operating income (NOI) of a property, which is the income after deducting all operating expenses (but not debt service or taxes). NOI is an important indicator of a property’s profitability and cash flow.

• Cash flow analysis: Cash flow analysis is a process of projecting the future cash flows of a property based on various assumptions and scenarios. It can help you estimate the cash-on-cash return (COC) of a property, which is the annual cash flow divided by the initial investment. COC is a measure of how quickly you can recoup your investment from the cash flow.

• Net operating income (NOI): NOI is the income after deducting all operating expenses (but not debt service or taxes) from a property. NOI is an important indicator of a property’s profitability and cash flow.

• Capitalization rate (cap rate): Cap rate is the ratio of NOI to the property value. Cap rate is a measure of how much income a property can generate relative to its value. It can also be used to estimate the value of a property based on its NOI and market cap rate. Cap rate is inversely related to value: the higher the cap rate, the lower the value, and vice versa.

• Internal rate of return (IRR): IRR is the annualized rate of return that equates the present value of a property’s future cash flows with its initial investment. IRR is a measure of how much return a property can generate over its holding period. It can also be used to compare different investment options based on their risk-adjusted returns.

• Return on investment (ROI): ROI is the ratio of the net profit from a property to the initial investment. ROI is a measure of how much profit a property can generate relative to its cost. It can also be used to compare different investment options based on their profitability.

You should also consider the risks and challenges associated with each property, such as environmental issues, zoning regulations, legal disputes, tenant turnover, competition, market fluctuations, and financing availability. You should also conduct a due diligence process to verify the accuracy of the information provided by the seller or broker and check for any hidden problems or liabilities with the property.

Make an offer and close the deal

After you have analyzed the properties and selected the one that best suits your investment goals and strategy, you can make an offer to the seller or broker. You should negotiate the best price and terms possible based on your analysis and market research. You should also secure financing for your purchase from a lender or investor that specializes in commercial real estate loans. You should also hire professionals such as lawyers, accountants, appraisers, inspectors, and contractors to help you with the closing process and ensure that everything goes smoothly.

Conclusion

Finding a good commercial property to invest in can be challenging, but rewarding. By following these tips and steps, you can increase your chances of finding a profitable and suitable property for your portfolio. You can also avoid some common mistakes that can cost you time and money.

If you need more help or guidance on finding a good commercial property to invest in, feel free to contact us at info@capitaldf.com. We are experts in commercial and residential real estate investing and we can help you fund the best deals in California. We look forward to hearing from you soon!

How AI, Data and Green Will Transform Pro Forma Analysis in Real Estate

Pro forma analysis is a vital tool for real estate investors and developers, as it helps them evaluate the feasibility and profitability of a property or project based on certain assumptions and projections. But how will pro forma analysis evolve in the future, as new technologies and trends emerge?

One of the key drivers of change is the integration of artificial intelligence (AI) and machine learning (ML) into pro forma analysis. AI and ML can help automate and optimize the process of creating and updating pro forma statements, as well as provide insights and recommendations based on data analysis and pattern recognition. For example, AI and ML can help identify the best assumptions, variables, and scenarios to use for pro forma analysis, as well as detect anomalies, risks, and opportunities.

Another driver of change is the enhanced data analytics and predictive modeling capabilities that are available for pro forma analysis. Data analytics can help collect, process, and visualize large amounts of data from various sources, such as market trends, customer behavior, competitor performance, and industry benchmarks. Predictive modeling can help forecast future outcomes and impacts based on historical data and current conditions. For example, data analytics and predictive modeling can help estimate the future revenue, expenses, cash flow, and profitability of a property or project under different scenarios.

A third driver of change is the impact of sustainability and green initiatives on pro forma analysis. Sustainability and green initiatives are becoming more important for real estate investors and developers, as they reflect the environmental, social, and governance (ESG) aspects of a property or project. Sustainability and green initiatives can affect the pro forma analysis in several ways, such as influencing the assumptions, variables, and scenarios used for the analysis, as well as affecting the costs, benefits, risks, and opportunities associated with the property or project. For example, sustainability and green initiatives can help reduce operating costs, increase customer loyalty, improve brand reputation, and create competitive advantages.

These are some of the future trends that will shape the pro forma analysis in real estate in the coming years. Pro forma analysis will become more dynamic, intelligent, and responsive to the changing needs and expectations of real estate investors and developers.

Ready to start your next real estate project? Contact us at 626.796.1680 and don’t let the lack of funding or the complexity of pro forma analysis stop you from pursuing your real estate dreams.

You Can Now Buy a Home With Just 1% Down — But Should You Get One of These Bargain Mortgages?

Two of the nation’s largest lenders are now removing the struggle many homebuyers face in saving up for a down payment by offering loans that require just 1% down. Experts warn that might not be a good thing.

Last month, the nation’s largest home mortgage lender, United Wholesale Mortgage, announced it would begin offering loans requiring down payments of only 1% of the home’s purchase price. The move was followed by fellow lender Rocket Mortgage, which announced this week the launch of a similar program called One+. The Rocket Mortgage loan doesn’t require borrowers to pay private mortgage insurance, or PMI, which traditionally kicks in when buyers have down payments of less than 20%. (PMI usually amounts to 0.5% to 1.5% of the loan amount per year, paid in monthly installments.)

Both lenders will kick in an additional 2% of the home’s sale price so the borrower has at least 3% down. (United Wholesale Mortgage will only kick in up to $4,000 toward the extra equity borrowers receive. There is no limit for Rocket Mortgage borrowers.) The loans are also income-restricted, geared toward lower- and moderate-income borrowers.

“It’s a really good way to expand homeownership for families that otherwise may not be able to get a hold of the American dream,” says David Stevens, CEO of Mountain Lake Consulting, a company that provides services to the mortgage industry and does not work with United Wholesale Mortgage or Rocket Mortgage.

“One unfortunate reality for homeownership is saving up for a down payment can be pretty tough,” he adds. “Oftentimes it ends up excluding families with more diverse backgrounds.”

He anticipates these new sorts of loans could help people of color and single parents who see the down payment as a barrier to homeownership.

“The biggest problems people have right now is affordability and down payments,” says Adam Speck, executive vice president of purchase at Rocket Mortgage. “This is something clients have been asking for.”

However, some have cautioned that these extremely low down payment loans could be risky for borrowers, especially those with limited savings.

And as home prices have begun falling in certain parts of the county, buyers who don’t make larger down payments could find themselves owing more on their mortgages than their homes are worth in these areas.

“Making it easier for everybody to get a mortgage with only 1% is like putting candy in front of a baby,” says mortgage lender Shmuel Shayowitz, president and chief lending officer at Approved Funding in River Edge, NJ. “People who should not be buying homes will be encouraged and enabled to buy homes.”

The average down payment was 13% in the first quarter of this year, according to a recent Realtor.com® analysis.

Low or no down payment loans aren’t that uncommon

These low or no down payment loans aren’t unprecedented.

Popular Department of Veterans Affairs loans and U.S. Department of Agriculture loans don’t require any down payments. The government loans respectively cater to active military, veterans, and their families or those purchasing property in rural areas.

Last year, Bank of America launched a 0% down payment program for first-time buyers purchasing properties in historically Black and Hispanic communities in certain cities.

Borrowers with qualifying credit scores can also snag a government-backed loan for as little as 3% down or a Federal Housing Administration loan for just 3.5% down. Many of these borrowers receive down payment assistance from various levels of government or through other sources, so their personal contributions might be less than the minimum required.

“Does 1% or 3.5% really make that big of a difference?” asks mortgage consultant Stevens. “The goal is to ultimately expand the pool of potential homebuyers.”

The extra up to $4,000 that United Wholesale Mortgage kicks in for borrowers to bring them up to 3% down is “basically a grant,” says the chief strategy officer, Alex Elezaj. “It’s helping make homeownership more accessible and more affordable across the country.”

The fine print of these 1% down mortgages

Not everyone is eligible for these mortgages.

Borrowers still need to have high enough credit scores, sufficient income, and low enough debt to be approved for these mortgages. For the United Wholesale Mortgage and Rocket Mortgage loans, buyers must have credit scores of at least 620 and cannot earn more than 80% of their area median income. The latter means if the typical, local family in a region earns $100,000, then the borrowers there can’t make more than $80,000 a year.

Those seeking the Rocket One+ mortgage must purchase a single-family home. And the United Wholesale Mortgage conventional 1% down loan is available only through mortgage brokers.

“The buyer still has to qualify for whatever that [monthly] payment is,” says mortgage consultant Stevens.

Rocket Mortgage borrowers also don’t have to worry about paying mortgage insurance each month. The lender plans to pay it for borrowers in a lump sum at the time they take out the loan.

Some in the mortgage industry have assumed the lenders will charge higher mortgage rates or fees to make up for down payment assistance—and in Rocket Mortgage’s case, the lack of mortgage insurance. But both lenders tell Realtor.com that the mortgage rates and fees offered on these loans are the same offered for their higher down payment mortgages.

United Wholesale Mortgage’s Elezaj says the goal of its 1% down loan is to help borrowers as well as drum up additional business for lenders right now. As mortgage rates spiked, many buyers have been priced out of the market while others are waiting for rates to fall. Few homeowners want to refinance with rates averaging 7.14% for 30-year fixed-rate loans as of Friday afternoon, according to Mortgage News Daily.

Mortgage applications were down 34.3% year over year in the week ending May 19, according to the Mortgage Bankers Association. This included purchase loans and refinances.

The risks of the 1% down mortgages

There are risks to taking out one of these loans.

Most first-time buyers don’t realize just how expensive homeownership can be. There are the big-ticket items that eventually need replacing, such as a roof or boiler or an appliance such as a stove or washing machine. Then there is the maintenance, such as having the gutters cleaned, the property landscaped, the HVAC system serviced. And there are also those unexpected expenses when something goes wrong without warning. Homes are called “money pits” for a reason.

Homeowners who don’t have much equity in their properties won’t have anything to tap into to pay these expenses. And if they opted for one of these loans because they didn’t have much in savings, they might not be able to cover these costs plus their mortgage.

“It’s potentially enabling homebuyers who should not be buying a house,” says mortgage lender Shayowitz. “The people who should be given mortgages with 1% down should be more highly qualified individuals with the income and the reserves to make their mortgage payments.”

Another concern is that, as the housing markets corrects and prices drop in many parts of the country, homebuyers who use small down payments could find themselves underwater on their loans.

But that’s not necessarily a problem in this era of accelerated housing cycles.

“They still have a place to live, [and] prices generally recover over time,” says Keith Gumbinger, a vice president at HSH.com, a mortgage information website.

But if they have to sell quickly, they could lose money if they owe more than the home is worth. They would have to absorb those losses.

Homeowners who don’t have much of their own money invested in their properties are also more likely to walk away from them if there are problems or their property value goes down. Foreclosure or short sales would severely damage someone’s credit.

“I don’t even think those are real concerns,” says Elezaj. He points out that borrowers still must have strong financial credentials to qualify for the loans. “These are good quality loans and good quality borrowers.”

The lender absorbs more of the risk than the borrower, says Gumbinger. If the borrower can’t pay the mortgage, then the lender doesn’t get paid until the home is ultimately sold.

Could 1% down mortgages trigger another housing crash?

While these loans might conjure up comparisons to the housing crash of the late 2000s, there are a few key differences that should prevent another crisis. These borrowers’ financials are carefully vetted versus the run-up to the recession when people were lying about how much they earned and still getting loans.

Their credit scores need to be high enough and their debt low enough, and they have to prove their income is sufficient to make the mortgage payments each month.

Plus, these loans don’t balloon in size over time or adjust as mortgage rates change. Both are 30-year, fixed-rate mortgages offering steady, monthly payments.

“These borrowers are at least reasonably qualified,” says Gumbinger.

SOURCE: REALTOR.COM

HAVE ANY SCENARIOS
YOU WANT US TO LOOK AT?

EITHER FILL OUT OUR
FORM OR GIVE US A CALL!

(626) 796-1680!

Yikes! Mortgage Rates Just Jumped Again—and Here’s How High They Might Go

Mortgage rates jumped higher this week, further dashing homebuyers’ hopes for an affordable spring home-shopping season.

Rates for a 30-year fixed-rate mortgage averaged 6.57% for the week ending May 25, according to Freddie Mac. That’s a hefty hike upward from last week’s 6.39%. As if that weren’t worrisome enough, Mortgage News Daily (which tabulates rates daily rather than weekly) pinned the average 30-year fixed rate even higher, at 7.12% on Thursday afternoon.

These numbers are a cruel twist given they arrive just as home prices seem to be drifting back down to earth.

“Recent momentum has home prices on a trend to dip below year-ago levels in a matter of weeks,” Realtor.com® Chief Economist Danielle Hale noted in her most recent analysis of housing data for the week ending May 20. “But while many homebuyers will certainly welcome a lower price tag, higher mortgage rates may minimize or erase any potential savings.”

When will buyers catch a break? When will homeowners decide to take the plunge and become sellers? Here’s what the latest real estate statistics seem to be saying in this edition of “How’s the Housing Market This Week?”

Home price gains keep grinding lower

In April, the median price of homes for sale came in at $430,000. Yet for the week ending May 20, listing prices were up just 0.7% compared with a year ago.

Home price gains keep shrinking, and Hale isn’t the only one expecting them to fall below year-ago levels soon. The economics team at Freddie Mac is forecasting a 2.9% decrease in national home prices over the course of 2023.

Of course, as Hale points out, all real estate is local; no one buys a “national” home.

Prices in the Midwest and Northeast remain more affordable, but they are gaining by double digits as these markets heat up. Meanwhile, prices in the West and South, which grew exponentially during the COVID-19 pandemic, are moderating or even falling now.

Why home sellers aren’t listing

The entire housing market would benefit if more homeowners decided to list their homes for sale, but few seem willing to volunteer.

For the week ending May 20, the number of new listings was down 26% versus the same time last year. There have been fewer listings compared WITH 2022 for almost an entire year now, thanks largely to the spike in mortgage rates.

“With roughly two-thirds of existing homeowners holding onto a mortgage more than 2 percentage points below current mortgage rates,” Hale said, “it’s easy to see why new listings lag behind.”

The slowing pace of home sales

Granted, overall inventory (comprising both new listings and older ones that have been lingering ) is up by 20% over last year. But the fact that many of those listings are stale suggests that buyers have already picked over these clunkers and passed.

And the slowing pace of sales suggests that home-shopping enthusiasm is on the wane.

In April, homes lingered on the market for a median of 49 days. And for the week ending May 20, listings spent an extra 15 days on the market compared with this same week last year.

Just how high might mortgage rates go?

Will homebuyers get rate relief anytime soon? Most signs point to not likely.

Just a month or so earlier, some economists predicted mortgage rates would dip lower later this year. But now, the Freddie economists aren’t so sure. They now forecast a scenario in which “long-term interest rates move largely sideways, staying in a range similar to where rates are today, perhaps moving up or down by around half a percentage point.”

Yet despite the gloomy outlook, determined buyers are finding ways to navigate today’s dismal market. Some are sifting through stale listings and lowballing. Others are exploring a whole new possibility they might not have considered before: new-construction homes.

“Even though existing home sales have waned in recent months, new-home sales have ticked up,” said Hale. “Buyers grappling with low inventory look to new construction as a relief valve.”

Given builders can sometimes offer discounted mortgage rates through preferred lenders, new construction might even cost less than pre-existing homes in certain areas today. This should give all homebuyers hope that the right house is out there, provided they keep looking and leave no stone unturned.

U.S. house prices experience the largest yearly decline since January 2012

Existing-home sales fell to a rate of 4.28 million in April, the National Association of Realtors said

The numbers: Sales of previously-owned homes in the U.S. fell 3.4% in April for the second month in a row, as buyers continue to deal with low levels of home listings and see-sawing mortgage rates.

Sales of existing homes in the U.S. fell to an annual rate of 4.28 million in April, the National Association of Realtors said Thursday.

That’s the number of homes that would be sold over an entire year if sales took place at the same rate in every month as it did in April. The numbers are seasonally adjusted.

The median price for an existing home fell by 1.7% from last April to $388,800 this year. The drop is the largest since January 2012, when home prices fell 2%. 

The drop in sales wasn’t as bad as what economists on Wall Street had expected. They forecast existing-home sales to total 4.26 million in April.

But compared with April 2022, home sales were down 23.2%.

Key details: The median price for an existing home fell by 1.7% from last April to $388,800 this year. The drop is the largest since January 2012, when home prices fell 2%. 

Home prices peaked in May 2021, where they grew 25.2% annually.

The number of homes on the market rose by 7.2% in April to 1.04 million units. But the number of fresh listings is still down from a year ago, the NAR said.

Homes listed for sale remained on the market for 22 days on average, down from 29 days in March. 

Sales of existing homes fell in all regions, with the sharpest drop in the West.

Understand how today’s global business practices, market dynamics, economic policies and more impact you with real-time news and analysis from MarketWatch.

All-cash buyers made up 28% of sales. The share of individual investors or second-home buyers was 17%. About 29% of homes were sold to first-time home buyers.

Big picture: Despite home sales dipping in April, most of the housing data is indicating that the U.S. housing market is in broad recovery. 

But a combination of issues are making it a slow one, from a lack of new home listings to see-sawing mortgage rates. 

Many homeowners are reluctant to sell for two reasons: They may be reluctant to give up an ultra-low mortgage rate secured during the pandemic for a much higher one, and they also don’t want to deal with competition 

Homebuilders are responding to the inventory crunch by bumping up construction of new homes. Housing starts, which refer to when a builder starts constructing a home, rose in April. Rates, on the other hand, are volatile: The 30-year mortgage rose to the highest level in two months to 6.57% as of May 12, the Mortgage Bankers Association said on Wednesday. It was 6.48% the previous week. 

Given the underlying issues on supply and rates, sentiment among U.S. consumers regarding the housing market has worsened: The number of people who think it’s a bad time to buy a home has hit a 45-year high.

What the realtors said: “The housing market – at least home sales – is still struggling to recover,” Lawrence Yun, chief economist at the National Association of Realtors, said. 

Aside from higher rates, “there’s just simply not enough inventory,” he noted. 

Yun also said that the NAR was sharing the idea of addressing the capital gains tax with members of Congress as a way to encourage more homeowners to sell their homes to ease the inventory shortage.

What are they saying? “The very strong underwriting standards during the last housing expansion along with solid labor market conditions will reduce the risk of defaults and forced selling going forward,” Thomas Simons, U.S. economist at Jefferies, wrote in a note.

“The housing sector is already in a recession, but we don’t expect consumption to contract significantly until a cycle of mass layoffs begins, likely during Q3,” he added.

Market reaction: Stocks were up in early trading on Thursday. The yield on the 10-year note TMUBMUSD10Y, 3.683% rose above 3.6%.

Source: Marketwatch.com

HAVE ANY SCENARIOS
YOU WANT US TO LOOK AT?

EITHER FILL OUT OUR
FORM OR GIVE US A CALL!

(626) 796-1680!

Good News for Homebuyers: Mortgage Rates Are Poised To Fall

Mortgage rates are poised to begin coming down.

The U.S. Federal Reserve isn’t expected to announce another interest rate hike in the wake of the banking crisis, especially as the inflation the Fed has been fighting continues to slow. The change in policy could give mortgage interest rates some room to come down. (Mortgage rates are separate from the Fed’s short-term rates, but they have been following a similar upward trajectory.)

Inflation was still up 4.9% year over year in April but dipped slightly from the previous month, when it was 5% year over year, according to the government’s consumer price index released on Wednesday. Decelerating inflation takes some of the pressure off of the Fed to keep raising rates. The Fed is also likely to avoid adding further strain on the banking industry, after several recent, high-profile bank failures.

“It will prevent mortgage rates from climbing too much higher,” says Realtor.com® Chief Economist Danielle Hale of the Fed ending its rate increases. “I expect them to gradually come down.”

She anticipates mortgage rates will stabilize over the short term and then begin dropping by the late summer and early fall. Rates could eventually return to the 5% and high 4% range. But those longing for the days of rock-bottom rates, such as when they fell below 3% during the COVID-19 pandemic, shouldn’t get their hopes up.

Mortgage rates averaged 6.68% for 30-year fixed-rate loans on Tuesday afternoon, according to Mortgage News Daily.

“We should expect to see mortgage rates decline as we move toward year end,” says David Stevens, CEO of Mountain Lake Consulting. The Moneta, VA-based consultancy focuses on the mortgage and real estate industries. “Rates will be closer to 5.5% by the end of this year.”

The Catch-22 of the mortgage market is that for mortgage rates to really drop, the economy will have to take a hit. The Fed has been aiming for a “soft landing” in which it is able to bring down inflation without plunging the country into a recession. It’s a tricky landing for the Fed. If anything goes wrong or the bank failures continue, the Fed might have to cut its rates to stimulate the economy. That will likely lead mortgage rates to fall.

Once rates drop below 6%, homeowners are expected to begin listing their homes for sale again, easing the housing shortage. Many haven’t wanted to trade up or down into new homes as doing so would require securing new mortgages with higher rates. Those homes will likely be snapped up quickly by eager buyers.

In the meantime, stable and beginning-to-fall mortgage rates are good for the housing market.

“It’s going to give buyers and sellers a chance to adapt to where mortgage rates are and factor it into their decision-making,” says Hale.

Source: Realtor.com

U.S. Home Prices Are Up, Down, and All Over the Place—See How They’re Faring Where You Live

These days, many folks are on edge over the much-feared housing recession—a dread that descended like a dark cloud last year as the real estate market seemed to seize up.

But it doesn’t appear that a housing bubble is about to pop. The housing market has slowed, to be sure, after mortgage interest rates rose rapidly in the back half of 2022 from rock-bottom lows below 3% to 20-year highs, briefly topping 7% before falling back into the 6% range. However, home prices are still going up in much of the country, while they’re falling in a few regions.

To clear the air and maybe quell the understandable impulse to clutch one’s pearls, we dug into what price changes around the country actually look like over the past year for the 250 biggest metropolitan areas in the U.S.—accounting for 85% of the national population—to see what the numbers say about home values.

Here’s what we found. For each metro, we tracked median home prices in March 2023, as well as year-over-year changes in overall price and price per square foot. Check out the market where you live!

In March, the median U.S. home listing was priced at $424,495, which is about 6% above where it was one year earlier, at $399,450 in March 2022. Looking at price per square foot (considered a more accurate metric for measuring price changes), the year-over-year increase is about 3%.“Some people were predicting a bigger drop in prices,” says Realtor.com® Chief Economist Danielle Hale. “Our forecast was among the more optimistic. We expected a little more price stickiness, a little more resistance to falling prices, so I think for the general conversation about real estate, it might be a little surprising for people.”

There were about 15% fewer new listings in March 2023 than in March 2022. That reflected the pessimism in the housing market: Sellers are worried they won’t get the prices they want and are loath to give up the ultralow mortgage rates they secured during the COVID-19 pandemic when buying a new home.

To pull together our cross-country snapshot of where prices are up and down, we compared median home list prices in March to a year ago using publicly available data on Realtor.com. We found that prices dipped in only about 1 in 5 metros. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

Across the U.S., but especially concentrated in the historically affordable Midwestern and Southern housing markets, homes are being listed above last year's prices. In some cases, well above.

Take a place like Omaha, NE, where the median home listing price in March reached $344,500. That was up 80% from just one year ago when the median list price was just $190,000. There is also Davenport, IA, where median listing prices reached nearly $220,000 in March. That's up more than 63% compared with one year before, when the median listing price was around $135,000.

Prices also rose dramatically in places like Jackson, TN, where they were up 59% year over year, to $223,000 in March; Champaign, IL, up 53%, to about $257,000; and Fayetteville, NC, up 44%, to $342,500.

"What we're seeing is that real estate is becoming more regional and more local," Hale says. "People have always said that, but for several years, housing was almost like a commodity, where everyone who owned saw appreciation. Now we see it really matters how the local economy is doing, how well the area is attracting new residents, how well the builders can keep up with demand."

But prices are down in historically more expensive areas of the country and places that attracted lots of new residents and saw skyrocketing demand during the pandemic-era real estate pump.

In Coeur d'Alene, ID, a popular vacation area that experienced a flood of new buyers over the past few years, the median list price was down 27% in March, to $717,000, down from $988,000 a year earlier. In Austin, TX, prices are down around 8%, to around $550,000. In Bend, OR, list prices fell about 6% below the same time last year, to $678,000, and in Denver, they're down about 1%, to $655,000.

“There’s still room for prices to grow in the Midwest," Hale says.

Source: Realtor.com

Where Americans Want To Live: These Ultra-Affordable, Up-and-Coming Real Estate Markets

Americans’ bank accounts are under siege. Whether it’s a trip to the supermarket or a night out for dinner and a movie, the cost of just about everything seems to be on the rise.

So homebuyers are doing something about it. Frustrated by high home prices and rising mortgage interest rates, they’re increasingly seeking out more affordable places to live—like Lafayette, IN.

The Lafayette metropolitan area was named the top up-and-coming real estate market this spring, according to the quarterly Wall Street Journal/Realtor.com® Emerging Housing Markets Index. The top 20 markets are generally smaller cities offering cheap homes for sale, low costs of living, and strong job markets. The index highlights real estate markets that economists believe will be strong this year.

A 3 bedroom, 3 bathroom home for sale for $475k in Lafayette, IN

“We are continuing to see this shift in demand for less expensive markets, many of which are in Midwestern markets,” says Hannah Jones, an economic data analyst at Realtor.com. “They didn’t see the same kind of price growth that larger cities did during the [COVID-19] pandemic, so they maintained affordability.”

Not a single one of these real estate markets was in the West, the region with the highest home prices.

The index identified the top markets for both buyers and investors out of the 300 largest metropolitan areas. It looks at metros with strong housing demand based on page views of local listings, the number of homes for sale, property taxes, and median days homes sit on the market before a sale. It also factors in metros with robust economies, lots of well-paying jobs, a good quality of life, and desirable amenities such as lots of small businesses and reasonable commutes to work. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

The median home list price in the Lafayette metro was $289,000—about a third less than the national median of $424,000 in March, according to the most recent Realtor.com data.

The manufacturing hub of Lafayette, named after American Revolutionary War hero Marquis de Lafayette, is located about an hour northwest of Indianapolis and two hours southeast of Chicago. Big-name employers include Caterpillar, Subaru, and Wabash National Corp., which produces refrigerated truck trailers. It’s also home to Purdue University.

“Homes in Lafayette are significantly more affordable, and it has a strong economy,” says Jones.

Just two of the top 20 emerging markets—Manchester, NH, which has been consistently ranked as one of the nation’s hottest markets, and Knoxville, TN—had price tags above the national median. And just one market, Columbus, OH, the state capital and home to Ohio State University, had a population of more than 1 million.

“These are some of the only markets where locals and first-time buyers can afford to buy a home based on local salaries,” says Jones.

Top 20 emerging real estate markets in spring 2023

1. Lafayette, IN ($289,000 median home list price)

2. Bloomington, IL ($339,000)

3. Elkhart, IN ($275,000)

4. Lebanon, PA ($372,000)

5. Fort Wayne, IN ($339,000)

6. Topeka, KS ($249,000)

7. Sioux City, IA ($305,000)

8. Omaha, NE ($345,000)

9. Springfield, IL ($144,000)

10. Manchester, NH ($550,000)

11. Janesville, WI ($331,000)

12. Columbus, OH ($375,000)

13. La Crosse, WI ($334,000)

14. Johnson City, TN ($413,00)

15. Springfield, OH ($172,000)

16. Hickory, NC ($349,000)

17. Burlington, NC ($368,000)

18. Columbia, MO ($367,000)

19. Waterloo, IA ($263,000)

20. Knoxville, TN ($470,000)
    
    Source: Realtor.com