A record year in agency multifamily MBS issuance pushed the overall commercial mortgage securitization market to an all-time high in 2017, according to a new analysis by Inside MBS & ABS.
Freddie Mac set a new company record for multifamily lending last year by financing $73.2 billion in loan purchase and guarantee volume. That’s a noteworthy 30 percent increase from the $56.8 billion financed in the previous year and translates to 820,000 units. Freddie attributes the growth to a host of new offerings and executions. The GSE set records in small-balance loans, targeted affordable housing and its Green Advantage businesses. “The strength of our innovative products, underwriting and world-class securities brings liquidity to every corner of the multifamily market,” said David Brickman, Freddie’s executive vice president and head of multifamily.
The government-sponsored enterprises both ended 2017 with record-setting numbers in the mul-tifamily market. Freddie Mac issued $68.0 billion in multifamily securities last year, up from $51.2 bil-lion the previous year.
It’s been an ugly year for retail chain bankruptcies, which means investors in commercial MBS backed by such properties are continuing to feel queasy about some of the bonds they own.
It's only a matter of time before the White House officially nominates acting Ginnie Mae president Michael Bright to be the permanent head of the agency...
In anticipation of a slight decline in multifamily mortgage originations, the Federal Housing Finance Agency last week lowered the multifamily lending caps for Fannie Mae and Freddie Mac in 2018. GSE multifamily business will be capped at $35.0 billion, down from the $36.5 billion level it’s been the past two years. FHFA analyzes the multifamily loan origination market size each quarter to decide if it will adjust the GSEs’ purchase limits. In the event the market picks up in 2018, the agency could raise the cap. And if the market slows even more than expected, it could lower the caps further.
After being absent for about 10 years, Fannie Mae and Freddie Mac will re-enter the low-income housing tax credit market to support affordable rental housing, the Federal Housing Finance Agency announced late this week. But the GSEs’ market share will be capped so they’re not in direct competition with the private market, and their investments must meet certain requirements. Fannie and Freddie will have an annual investment limit of $500 million, which translates to less than a 5 percent market share for each, according to the FHFA. Moreover, any investments more than $300 million during any year must be in areas that have been identified by the FHFA as markets that have difficulty attracting investors.
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