Fannie Mae And Freddie Mac On The Rise In The Midwest
The Midwest has always been strong for both Fannie Mae and Freddie Mac lending. According to Hunt Mortgage Group managing director Greg Cazel, business for this type of lending will only be getting stronger in certain states.
"In Wisconsin, banks are always very strong lenders, and tough competition," Greg tells Bisnow. "However, in Illinois borrowers tend to lean towards Fannie Mae and Freddie Mac when it's time for funding...and I expect their popularity to rise in other surrounding states."
Greg says that in 2015, the two government lenders' ability to expand their cap from $31B to $36.5B with a stop at $35B along the way is both a symptom and a cause of their success.
"That's a 20% increase in business that the government allows them to log and I'd be surprised if they didn't hit that number," Greg says.
With a higher cash reserve and flexibility for larger books of business, more clients are turning to Fannie and Freddie and a healthy number are receiving approvals.
Greg, who was born and raised in Chicago and specializes in Midwest financing, doesn't feel government lending's growth is an indictment of traditional bank options.
“I don’t think there’s distrust towards banks," he says. "Borrowers have always been smart. Certainly in the Midwest they’re going to tend to go non-recourse if they can."
He says agency lending typically provides a bit more certainty in terms of rates and that their book of business will "absolutely" continue to grow over the coming five years.
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