GSE multifamily lending to post record year, CREFC delegates hear

After a historical year for multifamily loan originations, GSE lenders should expect to do more or better this year, despite a slowdown in multifamily prices. That was the message CRE finance insiders heard at the GSE Multifamily Forum session, led by both borrowers and lenders, yesterday at the CRE Finance Council annual conference in Manhattan.

After a record year in 2015 for multifamily loan originations, GSE lenders are likely to do even more business this year.

That was the message that delegates heard at the GSE Multifamily Forum session, led by both borrowers and lenders, at the CRE Finance Council’s annual conference at the Marriott Marquis in Manhattan this week.

Marriott Marquis, New York
Marriott Marquis, New York

Addressing a packed conference hall in the Marriott Marquis near Times Square, one speaker, a senior executive with a national lender making multifamily loans, said that Fannie Mae and Freddie Mac are each targeting a $50 billion loan volume this year, which is “huge in a historical context.”

Total multifamily originations last year reached an “all-time record” of $256 billion, he added. Of that total, Fannie Mae and Freddie Mac provided a combined $89.6 billion in new multifamily lending volume.

This May, the FHFA increased the multifamily lending caps for Fannie and Freddie from $31 billion to $35 billion for 2016, though billions of additional affordable housing deals, which are exempt from the caps, are expected.

“GSEs now have the caps to fund all their requests, which is distinct from last year,” he said.

On top of larger caps, the GSEs might receive another boost from the US Congress next year, according to a Washington, DC-based lobbyist at the event, who said “there will be a new thirst for GSEs on the Hill next year,” using a metonym for the Congress.

A new Senate Banking Committee Chairman will be elected in 2017, which will directly impact agency lending policy, he said.

The likely choices are the Democratic Senator Sherrod Brown of Ohio, or the Republican Senator Mike Crapo of Idaho; and irregardless of party affiliation, congressmen from the “Middle America” states support GSEs because of their role lending into secondary and tertiary markets that fall within their districts.