While Fannie Mae and Freddie Mac still have a sizable pricing advantage over conduit lenders, some early signs of recovery are taking shape.

Last week, Column Financial began advertising conduit loans with historical leverage levels and terms for all types of commercial real estate. The firm is offering 10-year loans of between $5 million and $40 million at a 75 percent loan-to-value (LTV) ratio, a 1.25x debt-service coverage ratio (DSCR), and 30-year amortization, with the ability to lock the rate.

The loans can be done for a spread of 250 to 275 basis points over the swap rates, for an all-in rate of around 7.25 percent. By contrast, Fannie Mae and Freddie Mac are offering long-term loans at just over 6 percent, with five-year loans pricing closer to 5.75 percent.

The conduit pricing is still high, but not as high as earlier this year, when lenders were quoting 400 basis points over the Treasuries, for an all-in rate of more than 8 percent.

Column isn’t the only conduit heralding that market’s return. Goldman Sachs began to offer five-year interest-only conduit loans in mid-May. While Goldman’s program offers interest-only financing, the LTV ratio is around 70 percent, and the rates are more than 7 percent, a high rate for short-term money. Taken together, though, these programs may be a harbinger of better times for the battered commercial mortgage-backed securities market.

Beyond multifamily, Column’s conduit loans are offered for office, retail, industrial, storage, and mobile home parks. “We’re trying to pick up whatever the life companies and the agencies don’t have time for,” said Vic Clark, a managing director at Column. “There are a lot of deals that Fannie and Freddie won’t do, maybe because the deals are for C properties, or they’re smaller deals, or in rural areas.”

Clark said he’s already gotten almost 20 inquiries in the four-day span following Column’s announcement trumpeting the re-emergence of its conduit program. The bulk of those deals were retail, but there were also a few Class B and Class C multifamily deals.

Column is hoping to collect about $1 billion in loans that it would package and sell by the end of the year. “The conduits will be back,” Clark said. “It may take a little time, and it may come back rough and ugly like we were in the ’90s—where we did mostly B and C assets because the agencies were getting the cream of the crop—but it will be back.”