Wall Street Sees Promise in Multifamily Loans via WSJ

Fannie Mae FNMA -1.83% and Freddie Mac FMCC +0.33% are finally getting some private-sector competition in the business of financing loans in the debt market, at least in multifamily housing.

Wall Street lenders are getting more aggressive bidding on multifamily loans to securitize in recent months, helped as the demand for their commercial mortgage-backed securities has cut their costs to the lowest in more than four years, getting closer to those of government-advantaged programs of Freddie Mac, Fannie Mae and the Federal Housing Administration.

Congress has urged private capital to take over as the primary source of funding for real estate, after the housing bust left taxpayers shouldering billions in losses from the single-family portfolios of Fannie Mae and Freddie Mac. With CMBS recovering faster than private residential mortgage bond issuance, that shift may be seen first in multifamily housing, analysts said.

Read more...Wall Street Sees Promise in Multifamily Loans - Developments - WSJ