Fannie Mae’s $22.3 billion in year-to-date multifamily issuance through the third quarter suggests 2012’s total will easily top 2011’s, according to a capital markets executive.
Kimberly Johnson, Fannie’s vice president of multifamily capital markets, said the YTD 3Q total is “nearly as much as we did last year.” (Fannie’s MF issuance totaled $23.8 billion in 2011.)
The third quarter, when $8.5 billion in delegated underwriting and servicing multifamily mortgage-backed securities backed by new originations were issued, was particularly strong, she said. This was the highest issuance quarter Fannie Mae has seen in this category in at least three years, according to Johnson.
In addition to the $8.5 billion in new origination multifamily issuance, Fannie also resecuritized $4 billion in DUS MBS through its Guaranteed Multifamily Structures program in the third quarter.
How multifamily issuance might proceed is “hard to predict,” but so far it appears the third-quarter pace will be maintained through the fourth quarter, said Johnson. Low rates and fixed-rate single-family agency mortgage-backed securities buying by the Fed look like they will continue to fuel issuance and investor demand, she said.
Because the Federal Reserve has been buying mortgage securities in the single-family “resi” space, some traditional investors in that area are crossing over to buying multifamily securities, said Johnson.
“They don’t want to go against the Fed to buy paper,” she said.