Multi-Housing News - July 2009 - (Page 6)

executive insight Multifamily Financing Fannie Mae is currently providing much-needed capital on the permanent debt side for multifamily housing. Presently under conservatorship and government control, the agency is acting to manage risks in the changed economic environment. Keat Foong, executive editor at MHN, catches up with Fannie Mae Vice President of Multifamily Production Heidi McKibben to get an update on this source of multifamily financing. McKibben tells MHN that Fannie Mae is considering additional ways to “mitigate risks associated with weak rental demand.” Fannie Mae is also looking at increasing its sale of MortgageBacked Securities as a source of liquidity, in light Q&A of the welcome news that investors are returning to the market. How much of a concern are delinquency and default trends for multifamily loans? Fannie Mae’s multifamily serious delinquency rate was 0.32 percent as of March 31, as compared to 0.09 percent year-over-year. Not unexpectedly, the increase reflects stress on our multifamily guaranty book of business due to the severe economic downturn, which has adversely affected multifamily property values and refinancing options. As a result, we increased our multifamily combined loss reserves by $520 million during the first quarter of 2009 to $624 million as of March 31. We’re also looking at ways to mitigate risks associated with weak rental demand. This could include strengthening our risk management infrastructure, limiting risk on new business, and protecting and growing our existing book. Fannie Mae tightened its underwriting standards late last year. Will there be further adjustments? With respect to underwriting standards, we will continue to make adjustments to appropriately reflect changes in fundamentals at the property and overall market levels for multifamily assets. Heidi McKibben shares Fannie Mae’s strategy for mitigating risks associated with weak rental demand NOW AVAILABLE AS A DIGITAL EDITION Multi-Housing News, direct to your laptop or desktop in state-of-the-art format • Easy, reader-friendly navigation – page by page or click directly to the speciﬁc feature you want to read ﬁrst • Sharpest reproduction, zoom features and more • Additional photos and content not available in print • Direct links to advertisers’ web sites • Environmentally sensitive • Easy to store and reference Go to Multi-HousingNews.com and click on SUBSCRIBE at upper right. 6 July 2009 | Multi-Housing News | Official Publication of Multi-Housing World http://www.Multi-HousingNews.com http://www.Multi-HousingNews.com

Table of Contents for the Digital Edition of Multi-Housing News - July 2009

Multi-Housing News - July 2009
Contents
From the Editor
Executive Insight
Market Pulse
Profile
Market Report
Management
Case Study: Luxury
Finance
Kitchen & Bath
Products & Services
Tech Trends

Multi-Housing News - July 2009