2 min read
In an environment of tightened lending credit standards by banks, securing financing for multifamily properties has become increasingly challenging for borrowers. However, Freddie Mac and Fannie Mae (the “GSEs”) have stepped up to fill the gap, providing competitive multifamily loan terms while traditional banks remain on the sidelines.
Of the $4.4 trillion of outstanding commercial mortgages, $728 billion (16%) is maturing in 2023, with another $659 billion (15%) maturing in 2024. For multifamily alone, $193B in multifamily mortgages will mature this year and increasing to $260B in 2024.
As economic conditions fluctuate and regulatory pressures intensify, banks have responded by tightening their lending credit standards. These stricter lending requirements are leaving many borrowers with limited options to finance their multifamily projects.
According to the Federal Reserve’s April 2023 Senior Loan Officer Opinion Survey on Bank Lending Practices, the most common changes to bank credit standards were wider interest rate spreads over bank cost of funds and lower loan-to-value ratios. Other common themes include:
As banks tighten their lending credit standards, Freddie Mac and Fannie Mae play a vital role in the multifamily debt market consistently delivering much-needed liquidity to multifamily borrowers and promising certainty of execution through any and all stages of the economic cycle. With non-recourse programs offering competitive rates, terms, and streamlined processes, the GSEs are essential pillars in multifamily financing and serve as competitive alternatives to traditional bank financing in both good times and bad.
Multifamily owners seeking financing should consider working with a licensed Fannie Mae DUS and Freddie Mac Optigo lender with a proven track record and an established relationship with both GSEs.
On a combined basis, Walker & Dunlop originated $18 billion of loans with both Fannie Mae and Freddie Mac in 2022, making it the largest GSE lender in the country. Walker & Dunlop was also the nation’s sixth largest commercial real estate capital provider in 2022, and the #1 non-bank commercial real estate capital provider according to MSCI.
Walker & Dunlop celebrated its 85th anniversary last year and boasts a team of skilled specialists delivering certainty of execution.
If you are searching for the best rates and terms for multifamily new finance or refinance, we’re ready to help. Request a quote today.