The CEO of Fannie Mae, Timothy Mayopoulos, remarked in a call with HousingWire that this year marks the 30-year anniversary of their Delegated Underwriting and Servicing model for multifamily lenders.
These are the multifamily lenders who are authorized to underwrite, close and deliver most loans without Fannie Mae pre-review. And looking at their first quarter results today, the multifamily lending market is continuing to boom.
New multifamily business volume was $11.3 billion in the first quarter of 2018, a decrease from $20.3 billion in the fourth quarter of 2017.
While the volume dipped, that’s still 154,000 units of multifamily housing. More than 90% of the units the company financed were affordable to families earning at or below 120% of the area median income, providing support for both affordable and workforce housing.
However, the delinquency rate remains extremely low, at 0.13%. Mayopoulos explained that with the multifamily book of business, 100% of the bonds are issued through risk-sharing agreements. That means all the multifamily lenders listed here have skin in the game, and would share any potential losses.
“When you are financing multifamily like this, it seems more risky,” he said, “but demand is high, vacancy rates are low and turnover is much faster. The DUS model has worked for us for 30 years, through the good times and the bad.”