Although Fannie Mae smoked Freddie Mac on pricing in the first quarter—at times by as much as 50 basis points (bps)—Freddie Mac has aggressively responded, adjusting its pricing in April to reclaim the lead.

Freddie Mac’s portfolio loans are now pricing at about the same levels as Fannie Mae’s, but the difference is in the securitized offerings. Freddie Mac’s Capital Markets Execution (CME) program is now offering rates on standard 10-year deals of around 5.25 percent, while Fannie Mae’s mortgage-backed securities pricing is closer to 5.5 percent.

Fannie Mae also announced another round of tightening credit standards in April. As expected, Fannie Mae got tough on cash-out refinancings, lowering the leverage level by 5 bps to a maximum of 75 percent, though most deals will be underwritten closer to 65 percent or 70 percent. Fannie Mae is also taking a tougher stance on supplemental loans, especially on requests for a third supplemental loan.

The most notable change might be the new underwriting triggers that send certain deals for “pre-review,” where Fannie Mae assesses an individual deal rather than allowing lenders to work under the delegated model. The trigger mainly concerns collections. If a property’s net operating income has seen a 3 percent decline in the past three months, compared to the previous six months or past year, a deal will need to enter pre-review, regardless of its location.

The changes, while understandable, are frustrating borrowers and lenders who find themselves suddenly having to re-engineer deals that were already under application.

Still, Fannie Mae had a great first quarter. Agency lenders such as CWCapital, whose volumes are typically split equally between the two government-sponsored enterprises, saw that split tip 80/20 in favor of Fannie Mae in the first quarter.