Amid stress in the capital markets and a downturn in the commercial mortgage-backed securities market, Fannie Mae says it will expand liquidity, stability and affordability by increasing its participation in key segments of the multifamily market. The company has invested $20 billion in multifamily housing in the first half of 2008.
In an effort to meet the rapidly increasing demand for rental housing, Fannie Mae is expanding its commitment to purchase small multifamily loans of up to $3 million, or $5 million in certain markets. These loans typically finance a uniquely affordable asset class consisting of properties that are located in urban areas near public transportation and serve working families.
In addition, Fannie Mae plans to build on its market leadership in the seniors housing permanent debt market despite declining sales of seniors housing properties from the record pace of 2006 and 2007. Credit conditions have made investing in seniors housing in 2008 more challenging, Fannie Mae explains. The company provided over $1 billion in financing for seniors housing in the first half of 2008 and has increased its staff to help serve more borrowers and meet a multi-billion production goal for the year.
Fannie Mae notes that it will also help restore liquidity to the affordable multifamily bond market by continuing to offer its bond credit enhancement product, which provides credit enhancement for tax-exempt bonds issued by state and local housing finance agencies and is often used to finance low income housing tax credit properties and preserve older Department of Housing and Urban Development-assisted properties.
Source: Fannie Mae