Agency Loans Sit Behind 2023 Production
Terrydale Capital
Oct 14, 2024 4 Min read
When it comes to residential commercial acquisitions and refinances, we have seen some of the best offered rates than through Fannie and Freddie options. Especially benefitting through the dip in treasury yields mid-year 2024, Agency options lowered into the low-5’s for multifamily and other residential properties. Despite this positive trend, current production of Agency loans sits behind the volume in 2023.
Current Trends
While Agency loans are set to finance 40% of all CRE transactions this year, it remains well behind 2023 issuance numbers. Fannie Mae posted a 23% issuance decrease compared to 2023. Current issuance stands at $32.5 billion; however, this sits $10 billion less than 2023’s production and $27 billion under cap.
Freddie Mac was slightly ahead in issuance compared to 2023 in the first half of 2024, but has slowed and is poised to fall short of 2023’s production as well as far short of the $70 billion cap.
Why The Shift?
Given the recent rate environment, adjustable-rate mortgages have become less popular. With that, Fannie Mae has not generated any adjustable-rate mortgages yet this year according to a Berkadia report. CMBS volume shifted to shorter-term, 5-7 year options. This is due to two factors - oversaturation earlier in the year and borrowers anticipating pressure from treasuries on medium to longer-term options.
On top of this, government-sponsored entities have put a strict focus on the mitigation of fraud with new rules surrounding transactions through brokers, an increase in inspection requirements and additional underwriting requirements. This adds to the already elongated process to receive financing, which has led many deals under a tighter timetable to shift away from agency options.
Where Do We Sit?
Despite the dip in issuance, both Fannie and Freddie are pricing deals aggressively with a tight range. Despite treasuries beginning to bounce around as of late, Fannie and Freddie’s rate lock and index lock programs will continue to allow certain deals to take advantage of the moving treasuries.
In Conclusion
Despite the lower issuance numbers, this is not a bad sign for Agency loans. In fact, it has opened a variety of opportunities for residential investors as they continue to aggressively price their products. With us quoting rates in the low-5’s, the time is now to get ahead of your acquisition or refinance. When you need the right team behind you to prepare, Terrydale Capital is at the ready. Contact us today!
Partner With Terrydale Capital for Your Debt Financing Needs
When it comes to debt financing, understanding the right timing, process, and options is crucial. At Terrydale Capital, we provide a comprehensive range of commercial loan solutions tailored to meet your business's unique needs.
Success!
Product has been created successfully!
Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
