Fannie Mae Affordable Lender Meeting

Transcription

1 Fannie Mae Affordable Lender Meeting MAH Madness November 13, Fannie Mae. Trademarks of Fannie Mae.

2 Millions Our Stat Sheet Team Name: Multifamily Affordable Housing (MAH) $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- $2,300 87% Growth! $2,590 $3,000 $4, $3,901 Through 3Q 2017 Q Book Size: $32.7B Q SDQ: 0.02% Q Credit Losses: $1M

3 Full-court press

4 Marketing Center: Customize, download, and go! Customized marketing sheets at your fingertips Choose which products to customize: M.TEB ROAR Small Loans SRL SARM more to come! Widescreen Sized PowerPoint Template October

5 A simple, intuitive interface Navigate from the Multifamily home page at Fanniemae.com/multifamily Create an account Choose which product sheet to customize Add your contact info and photo Print, send, save, and go! Your download history is always available in your account Widescreen Sized PowerPoint Template October

6 Marketing Center: Customized marketing sheet example Widescreen Sized PowerPoint Template October

7 Healthy Housing Rewards

8 When we strengthen the connection between affordable housing and the long-term health and stability of the people and families who live there, we help create more sustainable communities across the country. Replace this square with your photo. Jeffery Hayward, Executive Vice President, Multifamily, Fannie Mae

9 Rewards for Healthy Design Rewards multifamily affordable borrowers whose properties incorporate healthpromoting design elements. Fannie Mae affordable borrowers benefit from a pricing incentive & reimbursement of the cost of certification. Multifamily Affordable Housing properties where at least 60% of the units are serving tenants at 60% of AMI or less are eligible Fannie Mae. Trademarks of Fannie Mae. 9

10 For more information visit the Fannie Mae website Download the Fitwel Residential Mark your calendars for Lender Training on December 11 th

11 Top Ten Trends Affecting Multifamily Affordable Housing Tanya Zahalak Multifamily Economist

12 Trend 1: The Conventional Market Remains Tight Multifamily vacancy remains at historic lows, coupled with 30 quarters of stable or growing rents Estimated National Rent Level and Vacancy Rate $1, % $1,225 Rent Level Vacancy Rate $1, % $1, % $1,125 $1, % 6.0% $1, % $ % $ % Source: Fannie Mae Multifamily Economics and Market Research Estimates

13 and concessions have returned to the lowest rates seen in a decade. National Concession Rate 8% 7% 6% 5% 4% 3% 2% 1% 0% Source: Axiometrics

14 % Increase from Prior Year Trend 2: Class B/C Remains At Least As Strong As 8.0% Class A While rent growth is slowing, class B/C rent growth remains at or above levels seen for Class A rent growth National Effective Rent Growth by Class 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% A B C -8.0% Source: Axiometrics

15 Trend 3: Roommates Doubling Up to Afford Rents supported by rapidly growing roommate renter households. Roommate households grew at the fastest pace over the last decade supporting occupancy and rent growth. Change in Renter Households by Type (%) Nonfamily: Roommates 28% Nonfamily: Householder living alone 14% Multifamily Single Family Female headed household Male headed household Married couple Total Renter 10.0% 15.0% 20.0% 25.0% 30.0% Source: American Community Survey

16 Trends in Subsidized Affordable Multifamily (MF)

17 Trend 4: Construction Costs Keep Rising Construction costs keep rising making preservation of existing affordable apartments even more important. National Apartment Construction Costs for a 4-7 story building $12.0 $11.5 $11.0 $10.5 $10.0 $9.5 $ Total Cost Average Cost Per Square Foot $195.0 $190.0 $185.0 $180.0 $175.0 $170.0 $165.0 $160.0 $155.0 Source: RSMeans

18 Trend 5: Vacancies Fell or Remained Unchanged in 65 Metros While vacancies for subsidized properties are just 1.7% nationally, major metro areas have much tighter vacancies which also continue to decline Trends in Median Vacancy Rates for Largest Metropolitan Areas (%) 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Fort Lauderdale - Palm Beach, FL Tampa-St. Petersburg, FL Seattle, WA Los Angeles, CA Denver Oakland-East Bay Boston Phoenix Philadelphia Austin Charlotte Baltimore District of Columbia Jacksonville National Q Q Source: Reis, Inc.

19 only a handful of metros now have vacancy rates above 3.5% and they are the smaller metros. Oil and gas metros showed some of the biggest increases in vacancy. Select Metros with the Highest Median Vacancy Rate as of Q (%) 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Odessa-Midland TX Tulsa OK Little Rock AR Oklahoma City OK Columbia SC St. Louis MO El Paso TX Lexington KY Albuquerque NM Las Vegas NV Savannah GA Wichita KS National Q Q Source: Reis, Inc.

20 Trend 6: Rents At Subsidized Affordable MF Properties Rose by a Healthy 1.9% Rents grew by 3.0 percent or more in 13 metros... Metro Areas with the Fastest Growing Rents (%) (year over year as Q2 2017) 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Source: Reis, Inc.

21 and large metros in the south and west showed even stronger rent growth. Median Asking Rents for LIHTC & Section 8 Units Largest Metros ($) $1,300 $1,200 $1,100 Q Q $1,000 $900 $800 $700 $600 Source: Reis, Inc. ; metros ranked from greatest percentage increase in rent to smallest.

22 Trend 7: Cap Rates for Subsidized Affordable MF Properties Continue to Fall Cap rates for investment-grade properties subsidized with LIHTC fell to 6.4%, just above the 5.6% rate for conventional properties. 8.5% Median Cap Rates for LIHTC and Conventional Properties 2009 YTD % 7.5% LIHTC Properties Market Rate Properties 7.0% 6.5% 6.0% 5.5% 5.0% Source: CoStar Group, YTD 2017 represents transactions through October 23, 2017 Note: Cap rates for LIHTC properties approximated by Affordable Rent-Restricted Category; Cap rates for market rate properties exclude any properties identified as having an affordable component.

23 Keep in Mind

24 Trend 8: There has been a substantial decline in affordability of MF rental housing Breakout of Multifamily Rental Housing Supply by Affordability Category 5.2% 5.7% 6.7% 7.8% 8.3% 40.1% 40.4% 44.6% 47.6% 47.7% 54.7% 53.9% 48.7% 44.6% 43.9% Low Income (AMI: 0%-60%) Workforce Housing (AMI: 60%-120%) Higher Income (AMI: 120+) Source: Fannie Mae, American Community Survey (ACS)

25 and Hurricanes Harvey, Irma and Maria affected the housing stock in some of the most affordable areas of the country. Texas Economic Impact by County Florida Economic Impact by County

26 Millions Trend 9: There is Still More Naturally Occurring Affordable MF Than Subsidized Affordable MF The majority of investment grade rental stock continues to fall in the Class B/C segment. 6.0 Change in Stock by Segment Class A Class B/C Subsidized Affordable MF Source: REIS, Inc.; Class B/C based on investment grade properties. National Low Income Housing Preservation Database for Subsidized Affordable Properties, excludes public housing. Note that the Preservation Database presents a snapshot in time Data is an average of the data presented in 2014 and Subsidized Affordable MF excludes public housing and units where there are tenant-based vouchers.

27 Trend 10: The Number of Funds Able to Provide Gap Financing Has Been Rising. The number of City, State and Local Housing Trust Funds has been rising since the end of the recession and now totals about 770 funds, many of which provide gap financing. Number of City, State and Local Housing Trust Funds Source: The 2016 Housing Trust Fund Report