Fannie Mae multifamily funding drops 14% in 2010
[Update 1: adds Fannie comment] Fannie Mae financing for multifamily properties in 2010 dropped 14% compared to 2009, with substantial decreases in funding to manufactured housing communities and senior housing. The government-sponsored enterprise said Monday it financed $16.9 billion worth of multifamily rental housing, equating to 2,300 mortgage loans and 306,000 rental units nationwide. That total is down from the $19.8 billion Fannie Mae funded in 2009. Fannie Mae's delegated underwriting and servicing lenders and affiliates originated 97%, or $16.4 billion, of the agency's 2010 volume. Lenders associated with the DUS platform take on some of the risk as part of an agreement with Fannie Mae, who purchases the loan thereafter. In 2009, about 94% of agency purchases were originated through DUS lenders. Financing to manufactured housing communities dropped 51% to $540 million in 2010 from $1.1 billion in 2009. This property description refers to housing units built entirely in a protected environment, such as a factory. In addition, funding for senior housing projects fell 36% during the same time period to $640 million from $1 billion. Fannie representatives from both the manufactured and senior housing sectors attributed the drops to less market activity in a conference call Tuesday morning. According to the reps, 2010 hosted fewer mergers and acquisitions than previous years, and that was reflected in the Fannie Mae volumes. Although the firm does anticipate senior housing financing qwill pick up this year. With regard to larger structured loans (those $25 million or greater and credit facilities), Fannie Mae financed $5.5 billion worth of loans. The agency also funded $2.4 billion in small loans (up to $3 million) during 2010. Funding for multifamily affordable housing dropped along with manufactured and senior housing, however, not as substantially. This type of loan goes to rent-restricted properties for people earning 60% or less of national median income. Financing fell almost 26% to $830 million. Still, Ken Bacon, executive vice president of Fannie Mae's multifamily mortgage business, commended the agency for its leading role in the multifamily sector. "For 25 years, Fannie Mae has played a significant role in the multifamily rental housing market, providing effective, reliable financing solutions that help lenders and borrowers succeed," Bacon said. "We continue to demonstrate our commitment to multifamily financing and providing housing to America's working families." Last week, Freddie Mac reported it funded $15 billion worth of multifamily mortgages in 2010. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.