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follow Patrick 2018 May 1, 8:07pm
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It’s a question other lenders are asking more and more as they find themselves being beat by either Fannie or Freddie.The reason the two loan agencies are outperforming institutional lenders is thanks to government insurance that allows them to charge lower rates than others, explains Real Capital Analytics’ Jim Costello in The Financial Times.Since the crash, in addition to providing traditional loans for homeowner’s mortgages, both agencies have been increasingly financing rental housing, taking on the risk for loans underwritten by commercial mortgage companies. Last year alone, they financed about 1.6 million rental units in the U.S. (In the fall, The Real Deal reported that Freddie was dominating multifamily lending in the New York area.)Of these “commercial mortgages,” the government-backed lenders’ combined interests clocked in at a total of about $500 billion in 2017, compared to $200 billion ten years ago. The Times reports that Freddie and Fannie’s main borrowers include Blackstone Group, Starwood Capital and Singapore’s sovereign wealth fund GIC among others.