Dive Brief:

• The government-sponsored enterprises were responsible for 48% of newly originated apartment loans in the first half of 2024, according to a report that data firm MSCI Real Assets shared with Multifamily Dive.
• In the five years before the pandemic, the GSEs had accounted for 54% of all new originations. In 2023, they captured 59% of the market, according to MSCI. 
• Investor-driven lenders took 14% of the market share in the first half after securing 9% in 2023. Commercial mortgage-backed securities lenders saw their volume increase from 3% in 2023 to 9% in the first half of 2024. Regional and community banks fell from 13% to 9% in the same timeframe.

Dive Insight:

Fannie Mae and Freddie Mac traditionally fill in the gaps in apartment financing when other lenders retreat. In the years after the global financial crisis of 2008, the GSEs kept the multifamily finance market afloat. And they’ve come to the rescue more recently in 2020 when COVID-19 slowed the market.

In 2023, as the CMBS universe shrunk and the capital markets grew skittish, the GSEs provided stability. However, in the first half of 2024, CMBS and investor-driven lenders gained share, anticipating rate cuts that would come in the second half of the year, according to MSCI.

In addition, other lenders, like large national banks and insurance companies, are still active in the market, giving borrowers a growing number of choices. 

“The options with the lenders are getting better by the day,” Drew Spitler, managing director and partner of New York City-based apartment owner The Dermot Co., told Multifamily Dive. “So I think we'll have some real good debt options on acquisitions going forward.”

The Dermot Co., a fairly conservative borrower that generally eschews mezzanine financing, is open to using lenders with the best rates and market execution, according to Spitler. That could be life companies, banks or Fannie Mae and Freddie Mac.

Very recently, Spitler said the GSEs have become more competitive, which could help them regain market share in the second half of the year. 

“The agencies have always been there, but we’ve seen those quotes tighten up recently,” he said.

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