"For the first time in a while, there is an open question as to whether the agencies will use the full amount of their volume caps," David Brickman, the former CEO of Freddie Mac and the current CEO of NewPoint Real Estate Capital, tells GlobeSt.com. It is a surprising turn of events, considering that the Freddie Mac and Fannie Mae, the two major agencies, have dominated the multifamily lending markets for years. However, in the first quarter, Fannie Mae saw $16 billion in originations, compared to $21.5 billion in for 1Q21, a 25% decrease. Although Freddie Mac's volume increased to $14.9 billion in the first quarter from $13.9 billion a year ago, representing growth of 7.3%, when combined the two agencies saw a roughly 13% decrease compared to the same time last year.

"I expect that they are at something close to a post-Great Financial Crisis-level low in terms of market share. So much more business has gone to debt funds but also to banks and life companies. Life companies have been pretty aggressive," Brickman tells GlobeSt.com. "If you are modest leverage, longer-term fixed rate financing, institutional product, the life companies have always been a good fit. If the agencies can't provide higher proceeds, then they are not able to continue. That is where we are for non-affordable, non-mission properties."

It isn't only core and core-plus market-rate properties that are securing alternative financing. Value-add players are utilizing bridge lenders and debt funds in place of the agencies. Banks are also picking up a lot of business that would have otherwise gone to Freddie and Fannie. "Banks have become more aggressive in trying to put multifamily onto their books the last few years as deposits have increased," says Brickman. "It is a more well-rounded market than it has been in some time."

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.