Real Estate Forum - January 2013

Stephenson notes that some companies
that own Fannie Mae DUS lenders are also
starting to originate loans that they securi-
tize. Durning, as another example, tells of
a multifamily bridge financing product
Prudential offers that it is now expanding.
“We have expanded a program called
Agency Gateway Program—it will allow us
to have $300 million of appetite in 2013
for transactions in which a borrower is
aiming for a Fannie Mae or Freddie Mac
permanent loan but for various reasons is
not ready.”
The product offers terms of up to four
years for multifamily products.

The competitive environment for mul-
tifamily bridge financing is a nuanced
one, Durning says, like much of the com-
mercial real estate industry these days.
“There are banks that are very competi-
tive with their relationships in this space.
There are other providers that play more
in mezzanine. Prudential, Durning says,
fits itself somewhere in between. “That is
the space where we think we will have the
best opportunity over banks’ low cost of
funds.”
game is over. No one knows when that will
be.” For the first debt crisis in 2011, Walker
notes, theoretically money should have fled
the US after its credit was downgraded by
Standard & Poor’s.

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The Political Situation

At one time, it seemed the bigger threat to the GSEs was coming from a different direction—namely, Washington DC’s Capitol Hill and the Obama administration. There has been talk from both quarters of privatiz-ing or even dismantling the GSEs.

Multifamily finance facilitators are not worried, though, at least not with this current Congress. Indeed, given the atmosphere on the Hill, Walker of Walker & Dunlop doesn’t foresee any major changes to the GSEs for at least two years. “It will be business as usual for Fannie and Freddie,” he predicts.

But what Washington delivers—in the form of intact GSES—it takes away, in the form of looming market chaos.

Walker is realistically sanguine about these other issues. Walker & Dunlop, for example, hasn’t built into its business plan the possibility that the US hits the debt ceiling and Congress refuses to raise it, but he is relatively certain the company—and even the industry—can ride out such events.

“Here is how I look at it—the US econ-
omy is without a doubt the strongest on
the face of planet, and we are getting a
wonderful hall pass for being the strongest
economy.”
“As a result of that we can do we shouldn’t
be able to do but are still getting away with
doing.” That said, he continues, “at some
point international investors will say the

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