“Affordable is the next product that you should be looking to buy,” said Vic Clark, senior managing director at Hunt Mortgage Group on the Agency Lending Outlook panel at RealShare Apartments. Clark moderated the panel—of speakers Jeffrey Erxleben, EVP and regional managing director at Northmarq Capital Group, Cristina Flynn, director of credit underwriting for the Western Region at Fannie Mae; and John Powell, director of agency production at Bellwether Enterprises—which discussed Fannie Mae and Freddie Mac lending activity and popular loan products.
“Fannie and Freddie are going to be coming out with products in the next few years for affordable housing,” said Clark, and Erxleben and Powell agreed. “ Both agencies have been robust in rolling out programs to attack affordable in different ways,” said Erxleben, adding that there is a mandate to do that business. Powell said that there has been an evolution away from rent-restricted affordable housing to market-driven affordable housing. “That is addressing the fact that people are spending a lot of income on rent,” he said. “I think Fannie and Freddie will spend a lot more time on workforce housing.”
Flynn was more elusive about the future of affordable housing products. “I think we will have more to come,” she said, adding that the success of the green program is evidence of how much headway that you can make when you create quality products that fulfill demand. “Speaking broadly with what we have seen from the success of green is that when there are incentives, you see growth in the space,” she said.
The green program is one of the most popular products. Powell said that they have done $200 million in green loans this year. “It has been a popular program,” he said. “Fannie and Freddie are willing to pay for the cost of the report, so it is really a no lose situation.” Erxleben added that there have been moments when the entire pipeline is green.
The small balance loans are also one of the more popular products for Fannie and Freddie. Both agencies have a small balance loan product, but Powell said they are “fundamentally different.” Erxleben said that both have been popular. “The small balance pipeline continues to build every year. Fannie and Freddie both have good products, and borrowers like it.”
Overall, Fannie and Freddie have done record-breaking volume this year, and have continued to roll out new products and refine their customer service. Erxleben said that they have faster closing times and cheaper costs, “all while doing record volume.” Powell concurred, adding, “There has been much greater focus on providing positive customer focus, and I think it shows. We are getting deals done more quickly and a better level of responsiveness.”
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