May 14, 2014 -- On Tuesday of this week, I attended Director Mel Watt’s announcement of the Federal Housing Finance Agency’s updated Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac and the 2014 Conservatorship Scorecard.
Let me share with you a few important points relating to our Multifamily business:
With these guideposts in place, we'll continue to do our important work. We are already in every market, every day. We have been actively financing affordable housing since our inception and supporting the Manufactured Housing Communities (MHC) market for over a decade with dedicated teams and a track record of success. I’ve highlighted a few of our recent transactions below. But before I go there, I wanted to share with you some more terrific news.
2014 Q1 Financial Results
Last week, Fannie Mae released our 2014 Q1 financial results, reporting net corporate income of $5.3 billion – the company’s ninth consecutive quarterly profit – and comprehensive income of $5.7 billion. In Multifamily, our Q1 2014 pre-tax income of $321 million continues to reflect the sound credit quality of our book of business. Although we’re in a competitive market, we’re pleased that the multifamily sector continues to demonstrate steady demand and stable fundamentals.
Working together with you helps us serve the widest spectrum of the multifamily market, including conventional, rent-restricted, cooperatives, seniors housing, student housing, and manufactured housing communities. Last year, we provided $2.3 billion in affordable financing and $1 billion in MHC financing. We are also a leading provider of financing to the small loan market, providing $2.3 billion in 2013. With the release of the 2014 Strategic Plan, we’re particularly excited about the work we’re doing in the Multifamily Affordable Housing (MAH), Manufactured Housing Communities, and small loan financing spaces.
MAH Deal in Southern California
Fannie Mae's certainty of execution was a key factor for a privately owned, repeat Fannie Mae borrower in selecting acquisition financing for a five-property portfolio. The $35 million fixed-rate loan supports the acquisition, rehabilitation, and preservation of 429 units of affordable housing in Southern California.
Through Fannie Mae’s MBS program – along with the sale of short-term tax exempt bonds, Low Income Housing Tax Credits, and soft subordinate debt – the properties will undergo an in-place rehabilitation with no tenant displacement.
In the Southern California market, there is a high barrier to entry for the creation of new affordable housing units. For tenants on fixed incomes, the creative financing structure Fannie Mae provided preserves a much-needed source of affordable housing.
MHC Deal in Louisiana
Fannie Mae provided $4.2 million in acquisition financing for a 373-pad, all-age, 3.5-star Manufactured Housing Community in Lake Charles, LA. The property features a full amenity package including a playground, basketball court, picnic area, cement streets, and bus shelters. The property has exhibited stable long-term occupancy and provides affordable housing in a safe environment. The sponsor is an experienced MHC operator.
2014 is off to a great start, and I look forward to working with all of you in the coming days and months.
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