Loan originations for Fannie Mae and Freddie Mac moderate while they navigate the rising interest rate environment. By John Nelson Multifamily mortgage loan originations rose 57 percent in the first quarter on a year-over-year basis, according to the Mortgage Bankers Association (MBA), but Fannie Mae and Freddie Mac’s combined multifamily origination volume dipped during the same period. Although Fannie Mae and Freddie Mac are still considered the premier capital sources for multifamily borrowers, sources say that the level of competition has increased as debt funds, banks, life insurance companies and lenders of commercial mortgage-backed securities (CMBS) are all active in the multifamily sector. What’s more, the sharp increase in inflation over the past year, the subsequent rise in interest rates and slowing economic growth have combined to make the near-term outlook for multifamily property valuations more challenging than at any other point in the past decade. Fannie Mae and Freddie Mac, commonly known as government-sponsored enterprises (GSEs), also tend to be risk-averse. “We’re in the middle of this capital markets-driven adjustment period that has impacted how everyone is looking at commercial real estate,” says Jeffrey Erxleben, president of Northmarq’s Dallas office. “Rising interest rates are adjusting values — by how …
