Multi-family housing could be worst-hit by Fannie and Freddie's troubles
November 18, 2009 01:30PM
Stuyvesant Town
Rising delinquencies for government-sponsored mortgage giants Fannie Mae and Freddie Mac could be most detrimental to the multi-family market. The two housing financiers accounted for 84 percent of all multi-family lending last year. If they were to reduce activity in that sector in the face of maturing loans, "apartment transactions could come to a near standstill," a report from the Harvard University Joint Center for Housing Studies found. Almost half of Fannie's commercial loan delinquencies are on apartment building loans that were originated near the top of the market. Its delinquency rate was 0.62 percent at the end of September, nearly four times what it was in September 2008. Among Fannie and Freddie's investments in the multi-family market were $1.5 billion in securities backed by the beleaguered Stuyvesant Town and Peter Cooper Village complex, now estimated to be worth just one-third of its $5.4 billion purchase price in 2006. [WSJ]
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Comments
Joshua
kind of an obvious issue coming down the line for fannie and freddie. they are the only game in town for the last year or 2. good thing theyre GSEs. theyre going to need some major govt money. lets hope banks figure it out over the next couple years otherwise the lending market will be effectively nothing through 2014.
Comment #1 Posted By: Joshua 11/18/09