Freddie Mac plans to accelerate its program to purchase loans backed by apartment buildings, increasing the availability of financing for landlords and helping bolster the multifamily real-estate market. Freddie Mac, the U.S. government-backed mortgage-finance giant, will likely fund more than $16 billion in apartment-building loans this year, up from $14.8 billion in 2010, according to David Brickman, head of multifamily funding for the McLean, VA, company. More than half of this year’s anticipated total will come in the second half, including a just-closed $73.5-million loan on Rosslyn Heights apartments, a 366-unit complex in Arlington, VA, according to Brickman. The bulk of the loans will be packaged into commercial mortgage-backed securities (CMBS) and sold to investors. CMBS issued by government-backed entities such as Freddie Mac and Fannie Mae have been in demand among investors. Fannie Mae invested $10.5 billion in the multifamily market for the first half of 2011, putting it on track to exceed the $16.9 billion in purchases last year.
The demand for Freddie Mac’s commercial mortgage bonds was apparent last month, when its eighth deal of the year was caught in the middle of a ratings drama. An 11th-hour internal review at Standard & Poor’s prevented the firm from delivering final ratings on a $1.5-billion CMBS offering from Goldman Sachs Group Inc. and Citigroup Inc. and on a $1.04-billion offering from Freddie Mac. The Goldman-Citigroup issue still had a rating from Morningstar, while the Freddie Mac deal still had a rating from Fitch Ratings. Freddie Mac’s deal went off anyway, as investors told dealers they were comfortable with the Freddie Mac CMBS, even with just the single Fitch rating.
