BAM Key Details:
- In 2022, Fannie Mae multifamily financing provided over $69 billion in continued support for affordable multifamily housing and other market segments
- Through their Delegated Underwriting and Servicing (DUS®) platform and their Low-Income Housing Tax Credit (LIHTC) equity, they expanded access to affordable housing throughout the U.S.
Fannie Mae multifamily financing provided over $69 billion in 2022 to expand nationwide access to affordable housing. That investment, in combination with those made by Freddie Mac, increased access to affordable housing for more people.
The new Renters Bill of Rights, released last week by the White House, lists “safe, quality, accessible, and affordable housing” as the first principle in promoting rental affordability.
Given its considerable investment, it looks as though Fannie Mae has embraced the challenge of expanding nationwide access to affordable housing.
Affordable housing for renters
Fannie Mae, through its Delegated Underwriting and Servicing (DUS®) platform, along with its Low-Income Housing Tax Credit (LIHTC) equity, is delivering on its commitment to expanding that access across the country.
This year marks our 35th anniversary of DUS, a platform that relies on shared risk and strong lender partnerships to serve the needs of the rental housing market. Our DUS program is well positioned to support the secondary market and play a key role as a stable source of liquidity. We look forward to working with our DUS lenders in the coming year to continue to serve the market and address its most pressing challenges.
Affordable housing progress in multiple market sectors
The success of Fannie Mae’s partnerships and of its presence in the multifamily market was evident across multiple sectors in 2022:
- Multifamily Affordable Housing volumes reached $10.3 billion, up nearly 7% from 2021
- Structured Transactions and Student Housing increased 82.6% and 26%, respectively
- Seniors Housing volumes totaled $1 billion, up more than 26% from 2021
Fannie Mae’s LIHTC investments yielded a reliable source of capital and exerted a stabilizing influence on affordable housing.
By committing all of its $1.7 billion cap for 2021 and 2022, it successfully created or preserved more than 35,000 affordable rental units.
In the past five years since re-entering the market, Fannie Mae has provided more than $3 billion in equity property investments throughout the U.S., including underserved communities and populations with unmet needs, like Native Americans and farmworker communities, as well as supportive housing development and disaster-impacted areas.
We want to thank our DUS lenders for their partnership and helping us support the multifamily market. Together with our lenders, we were active across all market segments while building a balanced portfolio.
The top 10 DUS lenders, who produced the highest business volumes in 2022:
- Walker & Dunlop, LLC: $11.4 billion
- Berkadia Commercial Mortgage, LLC: $6.8 billion
- CBRE Multifamily Capital, Inc.: $6.2 billion
- Wells Fargo Multifamily Capital: $4.7 billion
- Newmark: $4.6 billion
- Greystone Servicing Company LLC: $4.4 billion
- JLL Real Estate Capital, LLC: $4.2 billion
- KeyBank National Association: $3.6 billion
- Capital One, National Association: $3.3 billion
- Arbor Commercial Funding I, LLC: $3.1 billion
Included in the total multifamily production number are the following highlights for individual business categories:
- Structured Transactions: $10.3 billion, up nearly 83 percent from $5.7 billion in 2021
- Multifamily Affordable Housing: $10.3 billion, up nearly 7 percent from $9.6 billion in 2021
- Green Financing: $9.1 billion
- Small Loans: $3.4 billion
- Manufactured Housing Communities: $2.7 billion
- Student Housing: $1.2 billion, up 26 percent from $0.9 billion in 2021
- Seniors Housing: $1 billion, up more than 26 percent from $0.8 billion in 2021
Clarifying some terms
Multifamily Affordable Housing loans provide financing for rent-restricted properties and those receiving other federal and state subsidies. Affordable housing acquisitions also include—
- 20% at 80% AMI
- Special Public Purpose Multifamily Affordable Housing (SPP MAH)
- Sponsor-Initiated Affordability Multifamily Affordable Housing (SIA MAH)
Green loans are for financing properties with Green Building Certifications or loans projected to achieve specified reductions in a property’s energy and/or water usage that amount to at least 30%, of which a minimum 15% must be projected energy savings.
Small loans provide $6 million or less nationwide, including loans for properties with five or more units nationwide.
Top takeaways for real estate agents
The average difference in cost between comparable rental properties and for-sale properties should be on your list of things to know for any given month or quarter of the year. According to Realtor.com®, current rental prices are $800 less per month than buying nationwide. And the fact that home ownership allows buyers to build equity may not be enough to cancel that out.
So, it’s worth asking the question: if the U.S. government is so interested in providing affordable housing for renters, what is it doing to bridge that $800 gap and help more Americans become homeowners?
And, meanwhile, what can you do as an agent to harness the unique buying opportunity in today’s market, so more of the renters in your area can start building generational wealth?
