MULTIFAMILY INFLUENCER: Fannie Mae

Clockwise, from top left: EVP Jeffery R. Hayward, heads up of Fannie Mae Multifamily, leading a team that includes Michele M. Evans, SVP and Chief Operating Officer; Rob Levin, SVP and Head, Customer Engagement; and Manuel Menendez, Jr. , SVP and Multifamily Chief Credit Officer.

Earlier this year Fannie Mae completed a transaction in which seven reinsurers and insurers took on about $166 million of multifamily credit risk on a pool of debt that totaled around $11.1 billion. The transaction, a credit insurance risk transfer, was the first time Fannie Mae widely marketed these assets to reinsurers and was pleasantly surprised to find the deal oversubscribed.

It shouldn’t have been. For years Fannie Mae, as well as its counterpart Freddie Mac, have been expanding and tweaking their investment product lines to make them more attractive to a broader array of investors. Fannie Mae, in particular, has gotten quite good at that, introducing a number of innovations that have appealed to investors outside of Fannie Mae’s usual audience in 2018 alone. For instance, it made a change to its benchmark Connecticut Avenue Securities structure so they would better suit mortgage REITs’ portfolios. Briefly, Fannie Mae is now structuring CAS offerings as notes issued by trusts that qualify as Real Estate Mortgage Investment Conduits.

In another move, a Fannie Mae Multifamily Green GeMS REMIC has been added to Bloomberg Barclays MSCI Green Bond Index, opening the door for a more diverse investor base and improving its liquidity to boot.