GlobeSt.com (07/14/08); Morphy, Erika
Fannie Mae and Freddie Mac are not only the guarantors of nearly $12 trillion in U.S. home loans, they also provide essential funding support to the multifamily housing sector. Now, with the federal government stepping in to prop up the two flailing government-sponsored enterprises, it is likely their support for multifamily housing sales and acquisitions will not be as aggressive as it has been since the start of the ongoing credit crisis. Neil Shapiro, transactional real estate attorney at the New York law firm Herrick, Feinstein, states, "What I think is going to happen is that we will now see a significant slowdown in sales and acquisitions in the multifamily sector as Freddie and Fannie adopt a less aggressive policy." If this temporary pullback develops into a long-term policy and the CMBS (commercial mortgage-backed securities) market does not pick up the slack, Shapiro predicts "very significant" price cuts in multifamily properties, along with issues tied to refinancing.
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