Fannie Mae and Freddie Mac can still do large multifamily deals to meet their affordable housing goals under a final rule issued by the Department of Housing and Urban Development.Last year, the two government-sponsored enterprises used multibillion-dollar deals to meet their 2003 affordable housing goals, which became controversial when it was discovered that the sellers had the option to take the loans back at any time. In one deal, Freddie paid Washington Mutual $100 million for the right to securitize $6 billion in multifamily loans, even though the Seattle thrift effectively retained control of the loans. HUD eventually ruled that the mega-deals are permissible under its regulations, but it was expected to restrict such transactions in the future. The final rule requires the GSEs to retain ownership of the loans for at least one year. But it still allows mega-deals under the new affordable housing rules that go into effect Jan. 1. Freddie Mac chairman and chief executive Richard Syron noted in a conference call that the final rule does not prohibit wholesale transactions. "We have said in the past that we would prefer not to do those large transactions, if possible," Mr. Syron said. But "it's hard say we would never do them," he added.

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