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Investments

Freddie Mac calls 2012 a golden year for multifamily

Freddie Mac announced it posted a record $28.8 billion in multifamily business volume last year. That volume includes both loan purchase and bond guarantees.

The GSE’s multifamily business increased 42%, growing from $20.3 billion in 2011. The previous multifamily business activity record of $24 billion was reached in 2008.

"It was a phenomenal year for us and the sellers and servicers in our network. We achieved record volume while maintaining strong credit discipline and providing essential liquidity to the growing multifamily mortgage market," said David Brickman, senior vice president of Freddie Mac Multifamily.

He added, "In the fourth quarter, we completed about 33% of our yearly volume — approximately $10 billion in multifamily mortgages." 

The volume included Freddie Mac’s targeted affordable housing products, with finance apartments receiving some form of local, state or federal government subsidy.

Earlier this month, the GSE noted that multifamily affordability is now a key focus for the firm. 

Various factors are driving the increase in rental housing affordability, including demographic trends, household formations, higher credit standards for residential mortgages and changing attitudes about homeownership in light of the housing crisis, according to Brickman.

In regards to Freddie Mac’s Capital Markets Execution program, the program settled $25 billion, or 88% of the total new purchase volume in 2012. 

The GSE securitized $21.2 billion in CME mortgages underlying 17 new K-Certificate transactions with the guarantee of the Series A certificates, totaling $17.9 billion last year.

"We anticipate an increase in securitizations this year with 10-year mortgage loans being the predominant loan type as borrowers lock-in the low interest rates," Brickman said. 

About 54% of the total loan purchases or credit enhancement were refinances in 2012. Also, 40% were acquisitions last year, the enterprise noted.

Meanwhile, the GSE settled roughly $3 billion in targeted affordable housing products of which approximately $2.4 billion were multifamily bond credit enhancements in 2012.

Freddie Mac purchased about $650 million in senior housing mortgages and also bought more than $1.7 billion in student housing mortgages in 2012.

Furthermore, the Enterprise provided financing for more than 1,600 properties amounting to more than 435,000 apartment units, with the majority being affordable to families earning low or moderate incomes, according to the GSE.

Since the launch of Freddie Mac’s multifamily business in 1993, it has provided more 
than $290 billion in financing for about 60,000 multifamily properties.

"Multifamily is a profitable business line for Freddie Mac, and has produced nearly $4 billion in segment earnings since 2010. This includes $1.65 billion in the first nine months of 2012," Brickman said.

cmlynski@housingwire.com  

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