Fannie Mae, which is the informal name for the Federal National Mortgage Association (FNMA) — a government backed business — announced last week that it had invested $20 billion during the first half of 2008 in multifamily housing in a bid to shore up that area of the housing market.
“Affordable rental housing is increasingly needed during this housing and mortgage market downturn. Fannie Mae is increasing our product offerings to provide additional liquidity to meet the changing market needs,” said Phil Weber, SVP of Multifamily at Fannie Mae.
Billions Invested In Housing
Fannie Mae’s effort helps to meet the sharply increasing demand for rental housing, by purchasing Small Multifamily Loans of up to $3 million, or $5 million in certain markets. These types of loans typically undergird a an affordable asset class consisting of properties that are located in urban areas near public transportation and serve working families.
Fannie Mae invested approximately $5 billion in Small Loans in the first half of 2008, a significant increase over 2007 mid-year production of $3 billion. The company rewrote the Small Loan Guide and restructured its multifamily business to improve execution. It also made available the Micro Loan product earlier this year, which increases liquidity for small balance multifamily properties with mortgage loan amounts up to and including $750,000.
Seniors And Our Military Benefit Too
Other investment areas for Fannie Mae being planned include Senior Housing and the purchase of bonds benefiting military housing. These bonds are used to renovate existing on-base housing and build new units, something members of our nation’s military forces desperately need.
Fannie Mae was founded in 1938 as part of President Franklin D. Roosevelt’s New Deal program. At one time it dominated the secondary mortgage market until it was spun off as a semi-private corporation in 1968.
(Source: Fannie Mae)
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