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 In this Issue
 Fannie Mae
Dominates Multifamily Lending
Builder Confidence
in Apartment Market Weakens
NMHC Survey:
Mortgage Turmoil Fuels Apt. Demand
Fannie Mae Dominates Multifamily Lending
By Ronen
Abergel
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Ronen Abergel
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The subprime contagion we are currently
experiencing has led to another credit crunch as Wall Street and
securitization shops have escaped from the market, waiting for the
return of stability. Even with the turmoil, some shops were still
lending minimally on low-levered, cash-flowing properties to
borrowers that could accept the higher interest rates. However, the
sharp decline in the Asian and European markets in January 2008
eroded the bond markets, and consequently, virtually put the CMBS
shops out of commission.
And while the capital market faucets have
tightened once again, Fannie Mae, in accordance with its mandate,
is lending at record levels. Over the years, Fannie Mae has evolved
into a more flexible and creative capital source. In the past,
Fannie's regulations required stringent financing standards which
were sometimes difficult to meet. Consequently, borrowers often
turned to other sources of capital such as CMBS or community banks
instead. However, due to the intense competition from these
alternative lenders in recent years, Fannie Mae has redefined
itself. In fact, it has positioned itself as the most effective
source of capital for housing projects.
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Ronen Abergel
is a Director in Arbor's full-service New York, NY office. He can
be reached at 212-389-6548 or at rabergel@arbor.com.
Builder Confidence
in Apartment Market Weakens
Amid slower traffic by prospective renters,
builder confidence in the multifamily rental apartment market
slipped in the third quarter, according to the latest results of
the National Association of Home Builders' Multifamily Rental
Market Index (MRMI), released today.
Even though vacancy rates are down from recent
highs, apartment builders are apparently holding back on new
production right now to ensure that the market stays in
balance," said David Seiders, NAHB's Chief Economist.
"The market still is absorbing an excess inventory of condos
that has been converted to rental units."
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to read more
Source: The
National Association of Home Builders, www.NAHB.org
NMHC Survey: Mortgage Turmoil Fuels Apt.
Demand
The downturn in the for-sale housing market has
fueled demand for apartment residences, according to the National
Multi Housing Council's (NMHC) latest Quarterly Survey. According
to NMHC Chief Economist Mark Obrinsky, tightening mortgage credit
has reduced the outflow of renters into homeownership and increased
demand among apartment renters for the 'shadow' rental market
(unsold houses and condos that have left the for-sale market to
enter the rental market). Homeownership is at its lowest rate in
five-and-a-half years.
The Market Tightness Index, which measures
occupancy rates and/or rents, remained below 50 for the second time
in 17 quarters, slipping to 33.* As leasing tends to occur in the
summer and fall, the low number may reflect seasonal trends and
indicate readjustments in the housing market.
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to read more
Source: The
National Multi Housing Council, www.NMHC.org
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