X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON, DC-More worrisome signs that the GSEs’ current model is not sustainable: Fannie Mae is asking for $15 billion in emergency Treasury aid for the fourth time since it, along with Freddie Mac, has gone into conservatorship. Fannie Mae made the request in an SEC filing, along with a request to sell $2.6 billion of the $5.2 billon in Low Income Housing Tax credits that it has accumulated, but has been unable to use since it is no longer profitable. Goldman Sachs Group, according to news reports, is one of the potential buyers, but Treasury has yet to approve the deal. Speculation is that, at least in part, Treasury is hesitating over the move because it might be portrayed as yet another government handout to a Wall Street investment bank.

Fannie Mae’s troubles, which it shows little ability to resolve, are stoking fears yet again among multifamily borrowers and developers–which have come to rely almost entirely on the two GSEs and HUD for financing–that Congress and the Administration are going to make changes to the model, to the detriment of the industry. “I think once the health care debate is settled one way or another, housing is going to be front and center,” one executive at a multifamily finance company tells GlobeSt.com.

The options, as outlined by the GAO, in a recent report, fall along three tracts, none of which are entirely pleasing to multifamily developers. These include reconstituting the enterprises as for-profit corporations with government sponsorship, but place additional restrictions on them such as controls to minimize risk; establishing the enterprises as government corporations or agencies; and privatizing or worse, or terminating them. 

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.