bivey@imfpubs.com

Lenders sharply increased their deliveries of investment-property mortgages to the government-sponsored enterprises in the first quarter of 2021, according to a new analysis by Inside Nonconforming Markets. The move occurred just before new restrictions on GSE acquisitions of such loans took effect.

Roughly $39.65 billion of collateral backed by investment properties were included in MBS issued by Fannie Mae and Freddie Mac in the first quarter, a 21.7% sequential increase. The jump was outsized given that total GSE MBS issuance declined by 6.7% during that period and other so-called non-core GSE volume largely dropped.

In January, the Federal Housing Finance Agency and the Treasury Department amended the GSEs’ preferred stock purchase agreements, including a provision limiting purchases of loans for investment properties and second homes to a combined 7% of single-family acquisitions.

While the PSPAs were inked in January, the first Lender Letter from Fannie Mae addressing the issue was published March 10. Freddie didn’t broach the issue until March 31. For full details and exclusive tables, see the new edition of Inside Nonconforming Markets, now available online.