serious talks within the Administration took an already jittery commercial real estate industry by surprise. With Fannie Mae and Freddie Mac providing just about all of the liquidity to the multifamily industry, any change is bound to be viewed with alarm.

It is too early for the industry to draw conclusions however, David Cardwell, vice president of capital markets and technology of the National Multifamily Housing Council, tells GlobeSt.com. "The reports in the media are still very general--and they are only talking of residential defaults." He says he has not been in touch with the GSEs about the news.

The reports focus on the creation of a bad bank, which would absorb the non-performing assets on the GSEs' balance sheets. Even if multifamily is part of this scenario, the number of these loans in default or troubled are so small that it should not affect lending capacity, Cardwell says. "Within the last 90 days, real estate owned multifamily as a result of foreclosure are less than a handful out of a book of business that exceeds a couple of hundred billion dollars."

Fannie Mae and Freddie Mac have remained very supportive of the multifamily sector even as the residential sector tanked, Cardwell also points out. "The issue lenders have with the GSEs is not capacity, but rather leverage, equity and underwriting. In other words, issues that everyone in the market is having now."