Best of Times for Multi-Family

Here’s what the head of Fannie Mae’s multi-family division thinks of the current apartment market, straight from the MBA-CREF conference in San Diego.

The multi-family market is “in the middle of some of the best times this business is going to experience,” said the head of Fannie Mae’s multi-family division.

Jeffery Hayward, executive vice president and head of the Multifamily Mortgage Business at Fannie Mae, made the remarks during a meeting with reporters this week at the Mortgage Bankers Association’s (MBA) Commercial Real Estate Finance/Multifamily Housing Convention & Expo.

Hayward said that apartment vacancy rates are now at all-time lows. At the same time, demographic forces are sustaining the increase in the inflow into the market of 24- to 34-year olds at their peak renting age. As a result, current vacancy rates may continue to experience downward pressure in the near future.

Fannie Mae announced that it financed $28.9 million in multi-family loans in 2014, compared to $28.8 billion in financing provided to the sector in 2013. Altogether, 446,000 units of  multi-family units were financed last year by the agency. About 99 percent of these loans were securitized through Fannie Mae’s MBS execution.

“I look forward to working with our partners in 2015 to remain the leading source of financing and securtization for quality rental housing in the U.S., while balancing risk and return—in every market, for every income level, every day,” said Hayward in a statement.

Hayward added that fundamentals are in place for Fannie Mae to see healthy financing activity in 2015. Fannie Mae’s regulator the Federal Housing Finance Agency has imposed a footprint limit of $30 billion on Fannie Mae’s multi-family financing. Hayward said that this financing cap will not be changing in 2015.

Fannie Mae and Freddie Mac account for about 30 percent of the multi-family financing market. Freddie Mac, meanwhile, executed $28.3 billion in loan purchase and bond guarantee volume for its multi-family business in 2014, up 10 percent from $25.9 billion the previous year.

Walker & Dunlop L.L.C., Wells Fargo Multifamily Capital, Berkadia Commercial Mortgage L.L.C., CBRE Multifamily Capital Inc., and PNC Real Estate ranked among Fannie Mae’s top DUS producers in 2014.