DUS Lenders Fuel Fannie Mae's Loan Flow

HALF MOON BAY, CA - Fannie Mae announced that its DUS lenders delivered $18.2 billion of the company's total investment in multifamily rental housing, representing the strongest first-half ever for DUS lenders and an increase of 30 percent over mid-year 2007 production. Fannie Mae's investment in multifamily housing totaled $20 billion in the first half of 2008. Primary multifamily financing solutions include debt financing through lender partners and multifamily bond purchases.

"It is fitting as we celebrate the 20th anniversary of the DUS program that the DUS lenders had record production for the first half of this year," said Phil Weber, SVP of Multifamily at Fannie Mae. "Fannie Mae thanks our DUS lender partners for making DUS the multifamily lending market leader."

Fannie Mae's investments in Small Loans surged to nearly $5 billion in the first half of 2008. Small Loans are loans of up to $3 million, or $5 million in certain markets. The company also invested over $1.5 billion in Seniors Housing, and $264 million in Student Housing, doubling its mid-year 2007 production of $132 million. Fannie Mae's investment in Manufactured Housing increased four fold, from $89 million through mid-year 2007 to $458 million through mid-year 2008.

Use of Fannie Mae's Early Rate Lock feature more than doubled through mid-year 2008. The company continues to expand its rate lock offerings and provide certainty in a volatile interest rate environment. Fannie Mae is introducing a Streamlined Rate Lock execution that will enable lenders to lock the interest rate on their loan with the borrower at any point during the underwriting process. This Streamlined Rate Lock will also provide more delegation to lenders and offer borrowers certainty of execution.

Fannie Mae recently introduced the Refi PlusTM product to further build upon its market leadership and retain quality loans in its lenders' portfolios. Refi Plus provides borrowers with a streamlined process for refinancing their existing DUS loan. Borrowers can lock the interest rate for their refinance loan up to 24 months in advance of the expiration of their prepayment period, and can use a Supplemental Loan to immediately fund additional proceeds without having to wait for the existing DUS loan to mature. Borrowers will also benefit from lower out-of-pocket costs, and the faster processing and underwriting available through the Choice Refinance process.

In addition, Fannie Mae is working with lender partners to provide liquidity and stability across the property life cycle, from new construction to refinancing. Fannie Mae is working with several DUS lenders who have construction lending expertise to combine construction financing with permanent debt. The construction-to-permanent product will offer a seamless, lower cost execution and more certainty for the construction of new multifamily properties.