When an investor needed cash quickly to buy Hinkston Pond Apartments, it turned to a Fannie Mae program. The 120-unit apartment complex in Waukegan, Ill., received a $4.8 million Fannie Mae loan from Arbor Commercial Mortgage, despite the capital crisis.

Arbor was able to close the deal in less than 60 days, says Peter Margolin, director of Arbor's Illinois office. That's not bad for early February, when the capital markets were still frozen and the economy continued its free fall.

It's part of a relentless drumbeat of deal announcements from Fannie Mae and Freddie Mac, which have kept busy while other capital sources, including conduits, have effectively closed their doors.

Program loans from the two agencies now account for 80 percent to 90 percent of the long-term mortgages made to multifamily properties, according to officials from the two agencies.

Fannie Mae's Delegated Underwriting and Servicing (DUS) lenders and their partners closed $33.3 billion in Fannie Mae loans to apartment properties in 2008. That's up from $30.3 billion in 2007.

“Fannie Mae and its DUS lenders were pleased to provide significant liquidity and stability to the multifamily industry despite record levels of uncertainty and volatility,” says Phil Weber, senior vice president of multifamily for Fannie Mae.

Fannie Mae's multifamily lending programs grew even though the agency was seized by the federal government in September 2008.

Fannie closed deals even in the days immediately after the conservator, the Federal Housing Finance Agency (FHFA), took control. “It has truly been business as usual,” says Heidi McKibben, Fannie Mae's vice president and head of multifamily production.

“Without the GSEs (governmentsponsored enterprises) fulfilling their mission of providing liquidity, many lenders would have no other viable outlets for their loans. ”¦ That is an unacceptable outcome,” said conservator James Lockhart, director of the FHFA, in a statement.

However, one large piece of Fannie Mae's multifamily investment strategy vanished in 2008: its purchases of commercial mortgagebacked securities (CMBS). Fannie Mae spent $2.2 billion in 2008 to buy CMBS, along with loans from non-DUS lenders. That's less than a tenth of the $29.7 billion Fannie Mae put into those types of investments in 2007.

Largely because of the collapse of the CMBS market, Fannie Mae's total multifamily investments in 2008 fell by almost half. Fannie Mae invested a total of $35.5 billion in multifamily housing in 2008 compared with the total $60 billion it invested in 2007.

It was largely portfolios of bonds like CMBS that gave Fannie Mae and Freddie Mac the problems on their balance sheets that eventually led to their seizure by the government, according to housing experts. CMBS, for example, have lost much of their value for accounting purposes as the bonds were marked down to market prices during the capital crash. In contrast, in the portfolios of loans to multifamily properties made under Fannie and Freddie programs, the delinquency rate is still less than half a percent, according to the agencies.

Within its loan programs, Fannie also is working to meet its mission to help provide aff ordable housing. More than half of all multifamily units financed by Fannie Mae were affordable housing properties with apartments reserved for low- and very low-income families.