Fannie Mae's relatively new Guaranteed Multifamily Structures Program is gaining market traction.

The GSE recently sold four separate multifamily 'Mega' securities totaling $538 million. "Investor demand was very strong, especially given the over $4 billion in CMBS that was brought to market the previous week," Fannie vice president of capital markets Kimberly Johnson told ASR sister publication National Mortgage News. "We cleared all four tranches and, in general, it was very well received."

Megas are essentially MBS structures, but instead of being backed by loans they are collateralized by groups of existing Fannie Mae mortgage securities.

Johnson said sales were in line with the GSE's goal to maintain sizing around $500 million. "We did seven REMICs last year that were between $500 million and $800 million and this is kind of right in that same vicinity," she said.

"We've found that there is really good demand for Megas much in the same vein as we found for the REMICs," she noted. "With the way that they've traded I would say that we do expect to continue with Mega issuance in the GeMS program in the future." GeMS is Fannie's shorthand name for the program.

"It's all very interest rate dependent," Johnson added. "We've had such volatile movements in rates lately that people can continue to see Megas in times when we have sort of a rising rate environment and we expect more REMICs when we have a falling rate environment. But we expect both REMICs and Megas to be issued under the GeMS program this year."

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