From a balance sheet perspective, the situation could not begrimmer for Fannie Mae and Freddie Mac. The two governmentsponsored entities posted yet another quarter of eye-popping lossesfor Q1: Fannie Mae's $13.1 billion loss necessitated a request for$8.4 billion in additional federal funds. Freddie Mac, for itspart, posted $8 billion in red ink-and had to ask for a$10.6-billion government infusion of capital.

For multifamily players that rely on Fannie and Freddie, thereis some good news-and some more bad. The vast majority of the GSElosses are driven by their single-family portfolios. At FreddieMac, for example, the 60-day delinquency rate on its multifamilyportfolio is just 0.24%, according to Sam Chandan, chief economistat Real Capital Analytics.

Furthermore, as LaFonte Nesbitt, a partner in Holland &Knight's Real Estate practice points out, Fannie's loss for thefirst quarter of 2010 was less than half its loss in the firstquarter of 2009.