SAN DIEGO, CA -- Fannie Mae (FNM/NYSE) today announced that in a highly-competitive multifamily financing environment, the company and its lender and housing partners invested $21.2 billion in multifamily housing in 2004. Fannie Mae's multifamily financing solutions include debt financing through lender partners and investments in Low Income Housing Tax Credits (LIHTC) through syndication partners.

"Although there was an abundance of capital in multifamily markets and increased competition from conduits in 2004, Fannie Mae maintained its sound underwriting guidelines and delivered a strong performance," said Richard Lawch, senior vice president of Fannie Mae's Multifamily division. "Fannie Mae's lenders and housing partners are prepared to provide even more units of affordable rental housing in 2005."

Nearly 90 percent of the multifamily units financed by Fannie Mae in 2004 are affordable to families at or below the median income of their communities. Approximately 54 percent of all multifamily units were reserved for special affordable (low- and very-low income units), and 45 percent of all loans were made in underserved markets and areas. Fannie Mae committed a record $1.7 billion in multifamily equity investments that qualify for LIHTC, maintaining its position as the largest investor in LIHTCs.

Other highlights of 2004 production includes:

Total DUS^TM product: $12.9 billion, which includes some of the following specialty production:
Small Loans ($3 million or less): $3.4 billion;
Multifamily Affordable Housing (Rent-restricted for people earning 60 percent or less of median income): $2.5 billion;
Bond Credit Enhancement: $2.5 billion; Forward Commitments: $1.3 billion;
Credit Facilities: $2.5 billion;
Large Loans ($25 million or greater): $2 billion;
Seasoned Pools: $2.1 billion;
Seniors Housing: $789 million;
Student Housing: $123 million;
Manufactured Housing Communities: $611.7 million; and
Adjustable Rate Mortgages and Discount Mortgage Backed Securities: over $3 billion.

Fannie Mae Delegated Underwriting and Servicing (DUS^TM) lenders delivered $16.2 billion of the total multifamily financing issued in 2004. An additional $1.9 billion in debt financing was generated by MFlex^® lenders, who typically finance small multifamily developments.

Fannie Mae enhanced several products that provide lenders with solutions to meet borrowers' unique needs. Product innovation highlights in 2004 include:

• Improved the Extended Maturity Option (commonly called the "9-1") to allow borrowers to extend the term of their loan for up to one year beyond the initial maturity, and to repay the existing loan during that time without a prepayment premium. Over $4.7 billion in Extended Maturity Option loans were produced in 2004;
• Provided Fannie Mae credit enhancement for the first time on auction rate bonds, a significant milestone as it further diversifies the financing available for multifamily affordable housing;
• Enhanced the Extended Rate Lock (ERL) to protect borrowers from interest rate volatility by allowing the interest rate to be locked up to 12 months in advance of loan closing. An ERL can be used in conjunction with the acquisition of a property and also can be especially helpful for a borrower anticipating the need to refinance an existing loan. Over $2.2 billion in ERLs were produced in 2004; and
• Expanded our delegation of authority for lenders to reduce the underwriting floors for 9- and 10-year loans.

In addition, Fannie Mae's multifamily assets, comprised of multifamily mortgages purchased for cash, multifamily Mortgage-Backed Securities (MBS), investments in LIHTC, and other assets, now total $119.9 billion.