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Growth Continues in Fannie’s Multifamily Issuance

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The quarterly volume of apartment loan securitizations at Fannie Mae jumped by one fourth. A new government report indicates that the multifamily share of Fannie’s portfolio has traditionally been lower than Freddie Mac’s. It also showed that the combined share of the multifamily market for the two firms peaked in 2009 and has since fallen back.

Around $8.5 billion in multifamily mortgage-backed securities were issued by Fannie in the third quarter, a news release Tuesday said.

Volume was better than during the second quarter, when issuances amounted to $6.7 billion. So far in 2012, multifamily securitizations at the government-controlled enterprise totaled $22.3 billion.

Business also improved from the third-quarter 2011, when issuances of Fannie’s multifamily MBS totaled $5.4 billion.

Fannie Mae Vice President of Multifamily Capital Markets Kimberly Johnson explained in the report that rates below 4 percent were responsible for the “robust” originations that pushed issuance higher.

The secondary lender said that it additionally re-securitized $4.0 billion in DUS MBS through its guaranteed multifamily structures during the latest period. Four GeMS REMIC transactions were included in the number.

A report issued Tuesday from the Government Accountability Office indicated that the Washington, D.C.-based company had a lower percentage of multifamily loans in its portfolio than rival Freddie from 1994 through 2011 — a period when both secondary lenders saw increases in multifamily loan activities.

Multifamily activity has “greatly contributed” to the affordable housing goals of Fannie and Freddie, according to the GAO.

The two firms’ market share of the multifamily market surged from roughly 30 percent prior to 2008 to 86 percent in 2009 but retreated to 57 percent last year as more players returned to the market.

“While the enterprises’ multifamily business operations generally were profitable, both enterprises reported losses in 2008 and 2009,” the GAO report stated.

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