Take Benefits of the Big Deal in 2018-2019! Fannie Mae Multifamily Lending Earnings Increase in Stable Market!

Small multifamily properties those with five to fifty units are getting more attention as an important source of affordable housing. Nationwide, it is estimated that there are over 315,000 properties with between five and fifty apartment rental units. However, about 17% of these properties are located in one place; Los Angeles County. The country comprises more than 4,000 square miles and includes the cities of Los Angeles and Long Beach, as well as areas that have widely varying income levels, such as Beverly Hills and Compton. With such a high concentration of properties, it is worth taking a closer look at the small multifamily segment in Los Angeles County.

The market cap report of the Fannie Mae multifamily lending is the evidence that more than 90% of financing directed to low-income housing. Good news as Fannie Mae reports slight increase in net income in Q2.

Rising Continues for Fannie Mae Multifamily Lending Market

Fannie Mae hot streak continues, net income increases slightly in Q3. Freddie Mac outstrips Fannie Mae multifamily lending growth by 19 percentage points. However, the third-quarter financial earning report declared by Fannie Mae on Friday, showing its multifamily sector posted solid gains over again.

The Fannie Mae multifamily lending net interest income is $549 million in Q3, up $45 million from the Q2 and up $58 million from the Q3 of 2017 – as per latest Fannie Mae announcement by Fannie Mae.

The increase was because of the rise in guarantee fee revenue as the multifamily guaranty book grew during the quarter. Thus, new Fannie Mae multifamily lending business volume increased to $18.2 billion in the Q3 of 2018, up from $14.5 billion in the Q2 this year. Fannie Mae multifamily lending’s business volume few a totals of $44 billion during the first nine months of 2014. Of this, about 42% counted toward the FHFA’s 2018 (Federal Housing Finance Agency) multifamily volume cap.

The FHFA’s scorecard put loan production caps on Fannie Mae and Freddie Mac’s multifamily business to further the goal of maintaining multifamily activities while not impeding on the participation of private capital. The cap set for both companies was $35 billion. However, the FHFA designed exclusions from the cap to support affordable and underserved multifamily segments of the Fannie Mae multifamily lending market, saying these segments are not being adequately served by the private sector. Exclusions include financing for subsidized affordable housing, manufactured housing communities and small multifamily properties, between five and 50 units.

Evidence to Increasing Earning Opportunity from Fannie Mae Multifamily Lending Program

Additional exclusions include financing for affordable properties in rural areas, energy efficiency improvements in Enterprise-financed properties, and market-rate units that are affordable to very low, low and moderate-income tenants in standard, high-cost and very-high cost rental markets.

Fannie Mae multifamily lending financing for a total of 206,000 multifamily units during the Q3 is the solid evidence that 90% of those were affordable for families earning at or below 120% of the area median income.

Earlier this week, the FHFA has already announced that, per its preliminary determination, Fannie Mae multifamily lending program has passed all five of its low-income housing goals of 2017 a long ago. And although the program has been focused on lending to low-income households, the Fannie Mae multifamily lending program’s serious delinquency rate improved in the Q3, dropping to 0.07% as of 30^th September’ 2018. This is down from 0.11% as of 31^st December’ 2017! The reason for this massive drop was due to mainly a decrease in delinquent loans subject to forbearance agreements granted to borrowers in the areas affected by the hurricanes in the latter part of 2017.

Overall, the Fannie Mae multifamily lending options have seen a comprehensive income of $4 billion in the Q3 of 2018 which was primarily driven by the business fundamentals.

Know more about Fannie Mae multifamily lending market and your ROI to consider by visiting ALB Commercial Capital online or by calling directly on 800-510-2214!