The following article published in Multi Housing News Daily summarizes some recent changes in Fannie Mae’s apartment financing programs. Investors seeking financing for apartment projects would be well advised to investigate the programs offered by Fannie Mae and Freddie Mac since they have become very popular since the collapse of the CMBS financing markets.
Fannie Mae Announces Multifamily Financing Modifications, Record $2B in First Half Volume
Published: July 29, 2008
By Keat Foong, Executive Editor, MULTI HOUSING NEWS DAILY
Half Moon Bay, Calif. — Fannie Mae is working on a number of enhancements to its multifamily financing offerings, including a combined construction-permanent financing product.
The agency says it is cooperating with several DUS lenders who have construction lending expertise to combine construction financing with permanent debt. “The construction-to-permanent product will offer a seamless, lower cost execution and more certainty for the construction of new multifamily properties,� Fannie Mae states.
Currently, only HUD offers a multifamily construction-permanent loan, under its FHA mortgage insurance program. HUD’s combined financing requires one underwriting and approval for both loans, with the construction loan rolling over to permanent loan. Despite major improvements over the years, customers still complain HUD’s processing of the insured loan product can be cumbersome depending on the market.
Fannie Mae also announced it is enabling lenders to lock the interest rate on Fannie Mae loans at any point during the underwriting process. The Streamlined Rate Lock will provide more delegation to lenders and offer borrowers certainty of execution, it says.
Fannie Mae recently introduced the Refi PlusTM product, which is meant to make it easier for borrowers to refinance their existing DUS loan. Borrowers can lock the interest rate for their refinance loan up to 24 months in advance of the expiration of their prepayment period, and can use a Fannie Mae Supplemental Loan to immediately fund additional proceeds without having to wait for the existing DUS loan to mature.
Fannie Mae announced that it has experienced its strongest first-half year ever for DUS, with an increase of 30 percent over production in the same period in 2007. Fannie Mae’s investment in multifamily housing totaled $20 billion in the first half of 2008.
Fannie Mae reported large increases in its Small Loans and Student Housing financing. Its investments in Small Loans “surged� to nearly $5 billion in the first half of 2008. (Small Loans are loans of up to $3 million, or $5 million in certain markets.) The company also invested over $1.5 billion in Seniors Housing, and $264 million in Student Housing, doubling its mid-year 2007 production of $132 million. Fannie Mae’s investment in Manufactured Housing increased four fold, from $89 million through mid-year 2007 to $458 million through mid-year 2008.
No comments yet.