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Daily Real Estate News  |  September 10, 2008  |   Multi-Family Investors Fret About Fannie and Freddie
While the federal government's takeover of Fannie Mae and Freddie Mac is expected to help the housing market, buyers and sellers of apartment buildings are worried that proposed changes in government-sponsored entities could hurt them.

Because of the availability of financing from Fannie and Freddie, buildings with apartments for rent have outperformed other property sectors by 20 percent from March to May, 2008, according to real estate research firm Real Capital Analytics.

Mortgages bought by Fannie and Freddie have been cheaper than other loans because of the implied backing of the U.S. government, and multi-family loan delinquency rates remain much lower than those for single-family mortgages.

The multi-family industry is nervous that Fannie and Freddie will abandon their segment, but RBC Capital Markets analyst Mike Salinsky says it doesn't make sense for the GSEs to exit the multi-family lending business.

"If you truly want to run these in two or three years as for-profit entities, why abandon one of your most profitable businesses?" he asks.

Source: Reuters News, Ilaina Jonas (09/09/08)

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