McLEAN, VA—Freddie Mac has purchased $1 billion in manufactured housing loans, the GSE announced on Thursday. This milestone was reached year-and-a-half after launching the platform, and one year after Walker & Dunlop originated the first loan through it.
Now the GSE is looking to deepen the program, Kelly Brady, Freddie Mac Multifamily Vice President tells GlobeSt.com.
"The amount of liquidity we are providing is already significant and we don't want to oversaturate the market," she says. Instead Freddie Mac will look at ways it can help maintain the existing manufactured housing stock. Development of this product is rare and zoning can be difficult -- the Not In My Backyard Syndrome is apparently alive and well -- so one idea Freddie Mac is considering is lending to unstable or low occupancy developments or for projects that are only partially developed. If a project has already been zoned for manufactured housing, but has only been partially developed, it is easier to finish the project then seek out zoning and permits for a new project, she says.
Not that Brady is discounting the liquidity Freddie Mac has brought to the industry; indeed one could say it entered in the nick of time. GE Capital and Fannie Mae have traditionally provided much of the liquidity to manufactured housing, along with the CMBS market, but GE Capital abruptly ceased its lending this year when parent company pulled the plug on all of its financial operations. "There were many borrowers left holding commitments that were voided by GE," Brady says. "GE exiting the market left a fairly significant gap."
The appetite for these loans, at least when they are bundled in a larger pool of other assets, is very strong, giving Freddie Mac plenty of wiggle room to try something new. The GSE began folding these loans into its larger K-Deals at the end of last year and found investors were very bullish about their inclusion. "Investors like the credit and security of the cash flow. Adding them to the K deals has been an enhancement," she says.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
