At Fannie Mae, we mean business when it comes to preserving Multifamily Affordable housing, and the proof is stacking up. In partnership with our DUS® Lenders, we delivered a record amount of Affordable financing in the first quarter of 2016. This is a great start to the year and builds on the momentum of 2015 where we delivered over $3 billion in new production, representing almost 50,000 units nationwide.
How did we achieve record production levels?
- We innovated to meet ever-changing market conditions. Fannie Mae rolled out several new product enhancements that meet customer needs head-on. We expanded our options for moderate rehab deals with Reduced Occupancy Affordable Rehab (ROAR), which allows borrowers to substantially renovate or reposition Multifamily Affordable Housing properties without a construction loan. The MBS as Tax-Exempt Bond Collateral (M.TEB) execution allows customers to combine the ease of our MBS execution with all the benefits of tax-exempt bonds, delivering a lower interest rate and significant savings over the life of the loan. Other enhancements were rolled out for variable-rate financing options, including Index Bonds and our Flexible Choice Bridge. And now we also have Declining Prepay options for Affordable loans with terms of 5, 7, and 10 years.
- Our financing process got smarter. We eliminated old clunky processes and systems and gave you better tools to get business done. The DUS® Gateway system makes it easier to quote and process deals; and, our enhanced delegation and soft quote process ensures that we deliver speed and certainty of execution to you and our borrowers.
- Our partnership with our DUS Lenders continues to help us serve the market. Partnership is at the heart of our business model and business philosophy. Whether sharing risk or partnering to solve a client's deal challenges, together we continue to produce quality business with strong credit parameters.
The Fannie Mae Affordable team is committed to meeting the challenges of the Affordable market in 2016. Preserving the physical condition of properties and preserving the affordability for renters continues to be a vital need in the US. Current market dynamics can make it more profitable to reposition properties to serve higher-income tenants, threatening existing affordable housing stock. Adding to this dilemma is that new supply of affordable rental housing is not keeping pace with demand.
To meet these challenges and to capture even more Affordable business, Fannie Mae is providing you with more tools in 2016, including pricing reductions for FHA Risk-Sharing, expansion of small loan underwriting for MAH, new marketing collateral, and training to help you market the advantages of our products to customers in simple, compelling terms.
Together, we continue to be the recognized leader in Multifamily Affordable finance -- with innovative products and superior service to our customers. Thank you for your continued business and support to help us meet our Affordable Housing Goals. Here's to continued success through 2016!