WASHINGTON, DC-Fannie Mae priced its third Multifamily DUS REMIC for the year, totaling $904.3 million. The structure, issued under its Guaranteed Multifamily Structures (Fannie Mae GeMS) program, has a twist – it is the first GeMS deal to include 10-year DUS pools with 7-years of yield maintenance.
Fannie Mae had noted some recent softness in the demand for 10-year paper, so with this deal it decided to add more optionality to the long tranche, Kimberly Johnson, Fannie Mae Senior Vice President of Multifamily Capital Markets, tells GlobeSt.com.
"The 10/7 bonds increased yields by 10 to 12 basis points over our traditional 10/9.5 bonds, and were successful in attracting investors," she says. "The interest only tranche was extremely well bid, and we sold it at the tightest levels of the year," she said.
Both GSEs have been tweaking their securitization structure in response to market demand. Freddie Mac, for example, recently issued its third multifamily-backed Structured Pass-Through Certificates for $900 million. It was backed exclusively by 5-year collateral. Five-year collateral is a bit rare these days so Freddie Mac doesn't anticipate another offering like this. But it originated enough of these loans to go to market.
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