After acquiring multi-family loans at a record-breaking pace over the first seven months of the year, Fannie Mae and Freddie Mac have sharply pulled back in recent weeks, opening lending opportunities for others, including CMBS lenders, according to Commercial Mortgage Alert (CMA).CMA notes that agency lenders that originate and sell loans to Fannie Mae and Freddie Mac are expecting the agencies to limit their purchases for the rest of the year in order to keep their annual activity in line with last year’s volume.
Fannie and Freddie have widened spreads on multifamily loans to curtail volume. Fannie increased spreads by as much as 100 bp, while Freddie increased spreads by about 50 bp or more. The Federal Housing Finance Agency (FHFA) set a $35-billion purchase limit this year for each agency, with some exemptions. Both agencies are running ahead of the $35-billion pace through July.
The pullback is expected to be a windfall for CMBS programs. “With the 10-year swap rate declining 50 basis points in August and 200 basis points since November 2018, CMBS programs are highly competitive now,” commented Gary Unkel, Senior Loan Originator at ValueXpress. “We are quoting most full leverage multifamily transactions under 4.00%, while Fannie and Freddie are 4.25%-4.50% for the same transaction.” For your next multifamily quote, contact Gary at 212-883-6447 or by email at firstname.lastname@example.org.