WASHINGTON, DC - Freddie Mac, the second-largest provider of funding for U.S. mortgages, on Wednesday said it securitized $548 million in multifamily housing debt as it continues to fill a void left by the global credit crunch. Collateral for the the "tax-exempt bond securitization," or TEBS, is primarily tax-exempt and taxable multifamily housing revenue bonds, Freddie Mac said in a statement. The deal is Freddie Mac's second-largest TEBS transaction, and was completed with Citigroup unit Municipal Mortgage Holdings Inc.
Its completion may help ease concerns that the recent U.S. government takeover of Freddie Mac and Fannie Mae would force the companies to pull back from commercial markets where they have been crucial players during the credit crunch. "When it comes to running our business, we are not missing a beat," Mike May, Freddie Mac's senior vice president for multifamily housing, said in the statement.
Vacancy rates on major sectors of commercial real estate, including multifamily, are expected to rise next year as the economy slows and a lack of credit curtails activity, the National Association of Realtors said on Wednesday.
Freddie Mac and Fannie Mae have boosted securitizations and loans for multifamily housing financing since 2007 as investor aversion to risky securities froze Wall Street commercial mortgage-backed securities programs.
The federal regulator of Freddie Mac and Fannie Mae on Sept. 7 placed the companies under conservatorship to ensure they have enough capital to keep money flowing to the U.S. housing market.
The companies will be allowed to expand their investments by more than $140 billion through the end of 2009, but then must sharply cut back on the portfolios, according to the agreement.
Source: AllHeadlineNews.com