Fannie Mae and Freddie Mac saw a dramatic increase in volume last year, driven by a combination of historically low rates and a much-improved transaction market.
Fannie Mae processed $24.4 billion and Freddie Mac recorded $20.3 billion in multifamily debt in 2011, growing 44 percent and 32 percent, respectively, over the previous year.
“In terms of newly originated mortgage purchases, it was among our biggest years ever,” says David Brickman, senior vice president of multifamily for McLean, Va.–based Freddie Mac. “And I think we’re going to see a steady march upward again in 2012, given the continued, strong demand for multifamily assets, the low-rate environment, increased maturities, and the very strong fundamentals.”
Fannie recorded huge gains in its affordable housing division, notching $2.3 billion, a 282 percent increase over 2010, while Freddie’s affordable division stayed flat at $1.5 billion. Washington, D.C.–based Fannie also had a bounce-back year in seniors housing, recording $1.4 billion, an increase of 121 percent over the prior year and double the $700 million that Freddie processed last year.
But Freddie Mac grew—and beat Fannie out—in other market segments, such as student housing and bond credit enhancements. Freddie purchased more than $1.1 billion in student housing mortgages last year, up from $800 million in 2010, when Fannie recorded just $194 million. Tellingly, Fannie declined to break out its 2011 student housing figures in its annual volume figure.
New, Old Faces at CREF
The government-sponsored enterprises used the occasion of this year’s MBA Commercial Real Estate Finance (CREF) Convention, held Feb. 5–8 in Atlanta, to introduce some new faces in leadership this week. Fannie Mae’s new executive vice president of multifamily, Jeff Hayward, was at the show, while Freddie Mac announced the hiring of John Cannon as its new head of production.
Cannon left Berkadia back in October after a long stint with the company, which began as GMAC Commercial Mortgage and later became Capmark. Cannon, a longtime top Freddie Mac originator, flew down to the conference on his own dime—his official start date is Feb. 15.
But the hiring of Cannon illustrates the circular nature of the multifamily finance world, where many former GSE execs become top GSE originators in the private sector—and vice versa. For instance, former Freddie Mac head of production Mitch Kiffe is now with CBRE Capital Markets.
“Three years ago, Mitch Kiffe would’ve been on stage at CREF giving an award to John Cannon as the leading Freddie Mac seller,” says Brickman. “And if John were on board today, he’d be on stage giving an award to Mitch Kiffe, since CBRE was our largest seller in 2011.”