After the federal government took over Fannie Mae, the agency said it would proceed with business as usual when it comes to multifamily. But just before the conservatorship was announced, the former government-sponsored entity exited one multifamily venture?the Mid-America Apartment Communities Multifamily Fund I.

"Fannie expressed a desire to put future acquisitions on hold for a period," says Simon Wadsworth, CFO for Mid-America, a REIT based in Memphis that had a one-third interest in the fund. "My guess is that this is both to conserve cash for their lending operations and to help their earnings."

Fannie declined to comment about the decision. As of press time, the fund will make no more acquisitions, though it will maintain ownership of the two properties that were previously purchased and continue with the scheduled redevelopment plans. "We continue to have two properties in our joint venture with Fannie, and nothing changes about this," Wadsworth says. "We believe that Fannie and Freddie are as committed as ever to the multifamily sector, which is at the heart of their charters and also a profitable business line."

Before Fannie ran into hard times, Doug Bibby, president of the National Multi Housing Council, said that Fannie had been in discussions with other multifamily firms about similar joint ventures. "They couldn't get approval on the equity [for the Mid-America deal]," Bibby said. "Now, you have a new board and new leadership, and you don't know where this will go."