Jeff Hayward, Senior VP, Fannie Mae Multifamily Division

MHN INTERVIEW: Jeff Hayward, Senior VP, Fannie Mae Multifamily Division

Features, Finance/Investment, Headline News, National, News, Spotlight On Feb 17, 2012

By Jessica Fiur, News Editor
Washington, D.C.—Ken Bacon, the current vice president of the Fannie Mae multifamily division, is soon retiring, and it was recently announced that Jeff Hayward, a 25-year Fannie Mae veteran, would be taking over the position as senior vice president. Most recently, Hayward was head of the Fannie Mae National Servicing Organization, where he managed relationships with single-family servicers and oversaw foreclosure prevention efforts.
Hayward recently spoke with MHN about his new role, and what he foresees for multifamily.

MHN: Congratulations on your new role. What are some of the plans you have for the position?

Hayward: I’ve been with the company 25 years, and it is a distinct pleasure and honor to run the multifamily business. We last year helped finance 422,000 units of multifamily housing. My plan right now is to bring as much liquidity to the market as we can bring, keep up all the things that are part of our charter, which is to provide affordability and stability to the market. That’s really our charge, that’s why folks who work for me come to work every day, to make sure you’re fulfilling that mission that you’re supposed to do. I’m excited about that opportunity to do that.
MHN: What do you plan to do differently from your predecessor?

Hayward: My predecessor Ken Bacon did an awesome job before I came, and I’m ever grateful and thankful for what he did. I don’t plan to change much because the things that we were doing hold true, which is, you’re in the market every day making sure that you can finance apartments as they are created or refurbished. That’s not going to change, and you’re there no matter whether or not the market is up or down. That’s a tenant of the business—the steady stream—and we just won’t be changing that.
MHN: Recently there’s been some uncertainty with Fannie Mae. Do you think that’s affecting lenders right now?

Hayward: There are a lot of things that I just flat-out can’t control. And one of the things I can’t control is how others who are not here view us. The only thing we can control is what we deliver to the market, so if we’re there for lenders and we do our part, we can deliver. There’s going to be speculation right now, just because that’s the environment we’re in, but I can’t control it.
MHN: Has the rate of employees leaving Fannie Mae increased because of the uncertainty?

Hayward: I can only specifically talk about the multifamily division, which I run, and it’s been remarkable. People are so energized by the work we do. I haven’t had that problem. I don’t think our turnover rates have been any different than what they’ve been historically. This is a business that finances mostly to people that are at or below median income, so the intrinsic value of serving the market—knowing that’s part of your job, it’s not just profit making—I think that’s a reason why people are inspired and they’re staying in multifamily. I can’t speak for the whole company, but for my division, people have a purpose, and they know it.
MHN: Do you think multifamily will continue to be a steady industry?

Hayward: So the fundamentals of multifamily are, when you’re in a good situation in terms of employment improving, and when the demographics work—meaning people have a job in the 25 to 34 demographic, which is a heavy rental demographic—those people will be out looking for apartments to rent. I think things bode well for the multifamily business. There have not been as many new apartment units started in the last several years, and in the next couple of years there aren’t as many planned to be started, so you’re going to have some of the tension of dynamic supply and demand. There will be more demand, and I think the supply is ample, and that balance should be there over the next couple of years. Whether it’s there or not, I don’t know, but it looks like it’s going to be there.
MHN: Is there anything you’d like to add?

Hayward: Multifamily at Fannie Mae is important, and I can’t emphasize enough, because I get to work with these people, the folks here come to work every day in the multifamily division, the 400+ people, they couldn’t be happier about the jobs they have to do. I didn’t have to come in and do much motivation; folks are just on fire about the mission we have here.

Apartment Loans Commercial Mortgages Chicago, Nationally, Small Apartment Loans, FHA 223 F,FNMA DUS, FNMA Small Apartment Loan rates news

GlobeSt.com - Agency Finance Is the Driver of the Multifamily Bus - Daily News Article

GlobeSt.com - Agency Finance Is the Driver of the Multifamily Bus - Daily News Article

Fannie Mae and Freddie Mac originated about 60% of all multifamily loans last year, or $32 billion. They will likely exceed that record-- despite the ramped up competition they are seeing from the life insurance industry--in 2012 as originations are expected to reach $75 billion. In short, the GSEs are driving the multifamily bus right now: without the robust financing they provide, price points, cap rates and even supply and demand fundamentals would be entirely different.

Freddie Mac, for example, is expecting to close between $21 billion to $24 billion in originations this year, Tom Hamill, managing director, told the audience at RealShare Apartments East, produced by ALM's Real Estate Media Group. “We have already funded $1.9 billion so far in January.”

The GSEs, though, are facing headwinds, in the form of increased competition from other providers, and in the form of discouraging talk and measures from Capitol Hill. Recently the Treasury Department made a reference to winding down the GSEs, Doug Bibby, president of the National Multi Housing Council, said. “And by wind down, they meant wind down.” It is especially discouraging, he told the audience, because it is apparent that many in Congress don’t understand the role the GSEs play in multifamily.

A more troublesome trend is the pushback against the agencies in Congress. Executive bonuses were held up this year and as of Feb. 15th it was still unclear what was happening. Morale, in short, can be wobbly at the agencies and the lost of valuable human capital is an increasing fear. “It hurts when we lose people who have been with the agency for years,”

More Than 750 Banks at Risk of Failure over Next Two Years - CoStar Group

More Than 750 Banks at Risk of Failure over Next Two Years - CoStar Group

Apartment Loans Commercial Mortgages Chicago, Nationally, Small Apartment Loans, FHA 223 F,FNMA DUS, FNMA Small Apartment Loan rates news

Apartment sector upswing lets Amli put third local project on the drawing board - News - Crain's Chicago Business

Apartment sector upswing lets Amli put third local project on the drawing board - News - Crain's Chicago Business

With big apartment developments already under way in River North and Evanston, Amli Residential is working up plans for its third local one, a two-tower 398-unit project in the South Loop.

Amli CEO Greg Mutz confirms that the Chicago-based developer has signed a contract to buy the 3.5-acre site at the southwest corner of Clark and Polk streets, where it would build the project, just north of a 440-unit apartment building it owns.

“We really want to start this thing this year,” Mr. Mutz says. “We think the South Loop has a lot of upside.”

Amli is buying the property from AvalonBay Communities Inc., which had planned on building as many as 1,000 apartments on the parcel but backed off after the real estate market crashed in 2008.

The good times have returned to the apartment sector, allowing Amli and other landlords to hike rents as their buildings have filled up. And a building boom is well under way, with Amli starting construction last fall on a 409-unit tower in River North and a 214-unit project in north suburban Evanston.

When Affordable Housing Isn’t Really Affordable

When Affordable Housing Isn’t Really Affordable