Fannie Mae has added an expanded multifamily mortgage-backed securities execution that will allow DUS Mega deals to be syndicated and managed by broker-dealers with the aim of offering them in issuance sizes similar to DUS REMICs.
“We want to make sure our investors have the same access to Megas as they have to DUS REMICs,” Kimberly H. Johnson, vice president, capital markets, told this publication. “We are hoping they will have similar size and availability as our [DUS] REMICs have had in previous years.”
She said there were seven DUS REMIC deals in 2010 with a total unpaid principal balance of $4.8 billion. There have been nine DUS REMIC deals done since Fannie revitalized the program in the fourth quarter of 2009.
In addition to adding the syndicated DUS Mega option, Fannie is grouping it with DUS REMICs and traditional DUS Megas in a category it has rebranded “Fannie Mae Guaranteed Multifamily Structures” or “Fannie Mae GeMSTM.”
Johnson said the new branding is aimed at improving liquidity for all of its products that are structured off of multifamily collateral.
“We’ve really found investors appreciate the block size and collateral diversity…associated with our REMIC transactions and we think those benefits can be realized through a variety of structured transactions, syndicated Megas being one of them,” she said in an interview. “It really gives us agility to address reverse inquiries.”
The government-sponsored enterprise, which has been a major source of multifamily liquidity since private market players pulled out during the downturn, said the execution allows it to further expand the liquidity available to multifamily market participants.
