Wachovia Selected As Multifamily Underwriter

NEW YORK, NY - Freddie Mac said it named a Wachovia Corp. unit as the second "fully delegated" underwriter for an affordable housing program. Wachovia Multifamily Capital Inc., a seller/servicer of Freddie Mac multifamily loans, can now underwrite multifamily loans on Freddie Mac's behalf, Patti Boerger, Freddie Mac spokeswoman, said in an interview. "We've given them the authority to underwrite loans on our behalf, so it speeds up the processing time," she said.

Unlike the residential mortgage market, where Freddie Mac, the No. 2 U.S. home funding company, and its larger counterpart Fannie Mae use automated underwriting systems, the multi-family process is manual, she said. Lenders in the program get faster processing and flexibility in exchange for sharing risk when underwriting multifamily mortgages secured by targeted affordable properties meeting certain minimum rent or income limits, according to Freddie Mac. Freddie Mac named its first fully delegated underwriter in this program last September.

"Delegated underwriting lets us serve targeted affordable borrowers by tapping more effectively into the delegated seller/servicers' capacity to originate and underwrite, in exchange for a risk-sharing relationship with us," Kimball Griffith, Freddie Mac vice president of affordable sales and Investments, said in a release on Tuesday. Delegated lenders work first to receive initial underwriting authority for loans from Freddie Mac, before getting fully delegated underwriting status, it said.

"Together through delegated underwriting, Wachovia and Freddie Mac will be able to expand our efforts and provide more rapid deployment of capital for the entire spectrum of affordable housing products, including bond credit enhancement, preservation and low-income housing tax credit deals of all types," Daniel Cunningham, head of affordable housing at Wachovia Multifamily Capital, said in the release.

Freddie Mac said it has bought more than $189 billion in multifamily mortgages, financing rental housing for more than 4 million families, since launching its current multifamily business in 1993.