GAO Issues Report Highlighting GSEs’ Multifamily Programs Strong Performance via NMHC

On Oct. 9, 2012, the General Accountability Office (GAO) issued a report on the multifamily mortgage financing activities of Fannie Mae and Freddie Mac. The 98-page report provides data and information about the multifamily mortgage purchase activities of the two government-sponsored enterprises (GSEs), compares and contrasts their activities to private mortgage capital serving the apartment sector and highlights their strong credit performance and financing of workforce and affordable housing.

The report confirms NMHC/NAA’s main advocacy message: Fannie and Freddie provide a critical source of liquidity for the industry, serving a wide range of apartment markets, borrowers and properties.

The report also emphasizes their capacity to backstop the multifamily finance system, providing critical debt capital when private capital markets pullback on lending and also filling the gaps when the markets are fully active. The report notes that during normal market conditions, institutional lenders such as banks, life insurance companies and the private-label securities market dominate the apartment finance market, accounting for more than 70 percent of all mortgage debt originated each year. However, when the financial markets retreat, Fannie and Freddie have the capacity to accommodate borrower needs.

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