Regions among two dozen banks approved for Fannie Mae multifamily program

IRMINGHAM, Alabama – Regions Bank said today it is now approved as a Fannie Mae Delegated Underwriting Servicing, or DUS, lender, enhancing its financing capabilities in the hot multifamily real estate sector.

Regions also said it has acquired a DUS servicing portfolio totaling approximately $1 billion in domestic, multifamily properties.

In addition to apartments, the Fannie Mae multifamily products can be used to finance senior housing and low-income housing projects.

Regions said the Fannie Mae DUS approval will complement its existing real estate banking and capital markets capabilities and allow the bank to provide long-term, flexible financing to support multifamily housing clients nationwide.

“Multifamily housing continues to be an important and growing sector of the real estate market and permanent, flexible financing for completed developments is critically important to increasing both the availability and affordability of housing,” John Turner, head of Regions’ Corporate Bank, said in a statement. “Regions Bank is pleased to now be one of the 24 Fannie Mae designated DUS lenders in the U.S. This capability is a significant addition to the bank’s existing suite of debt capital products to meet the needs of real estate banking clients.”

Under the program, Fannie Mae relies primarily on the DUS network of financial institutions and independent mortgage lenders to execute its multifamily business. Fannie Mae and its lender partners have provided more than $300 billion in liquidity to the mortgage market to finance more than 6.3 million units of multifamily housing since the DUS program was launched in 1988.

Lenders share the risk of the loan with Fannie Mae through a loss sharing agreement. Fannie Mae assumes two-thirds of the risk and the lender assumes one-third of the risk. Loans are typically individually securitized and sold to investors as mortgage-backed securities. As a result, the loans do not remain on the lender’s balance sheet.

“We are very excited to welcome Regions Bank as our newest Fannie Mae DUS lender,” Hilary Provinse, senior vice president of multifamily customer engagement at Fannie Mae, said in a statement. “Our partnership with our lenders is the key to the success of Fannie Mae’s Multifamily DUS Program and we believe Regions has the commercial real estate knowledge and experience to make this partnership successful.”

Bo Flurry with Birmingham’s Rock Apartment Advisors said the bank is smart to expand its multifamily offerings.

“It’s a great move for Regions as the multifamily space is extremely active, and the lending market is highly competitive which is working in the favor of borrowers,” Flurry said. “Agencies (Fannie and Freddie) are providing much of the financing for these properties, but (commercial mortgage-backed securities) are making a charge right now to gain market share. Most of the larger banks have DUS lending platforms so this will help Regions stay competitive in the marketplace and offer more products to their clients.”

Rock, an affiliate of Harbert Realty, focuses exclusively on apartment brokerage services throughout the Southeast and has brokered more than $1.8 billion in apartment deals since it started in 2003.

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