Agency Finance Is the Driver of the Multifamily Bus via GlobeSt.com

Fannie Mae and Freddie Mac originated about 60% of all multifamily loans last year, or $32 billion. They will likely exceed that record-- despite the ramped up competition they are seeing from the life insurance industry--in 2012 as originations are expected to reach $75 billion. In short, the GSEs are driving the multifamily bus right now: without the robust financing they provide, price points, cap rates and even supply and demand fundamentals would be entirely different.

Freddie Mac, for example, is expecting to close between $21 billion to $24 billion in originations this year, Tom Hamill, managing director, told the audience at RealShare Apartments East, produced by ALM's Real Estate Media Group. “We have already funded $1.9 billion so far in January.”

The GSEs, though, are facing headwinds, in the form of increased competition from other providers, and in the form of discouraging talk and measures from Capitol Hill. Recently the Treasury Department made a reference to winding down the GSEs, Doug Bibby, president of the National Multi Housing Council, said. “And by wind down, they meant wind down.” It is especially discouraging, he told the audience, because it is apparent that many in Congress don’t understand the role the GSEs play in multifamily.

Read more...GlobeSt.com - Agency Finance Is the Driver of the Multifamily Bus - Daily News Article