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In Multifamily Finance, Fannie and Freddie Are Still the Elephant in the Room. Shlomi Ronen emphasized that Congress and the FHFA ought to implement reforms with deliberation, changes that aren’t well explained clearly in advance could startle the market.
Regardless of where the agencies go from here, a survey of multifamily lending players underscored how high the stakes would be for any major reorganization. Shlomi Ronen, the founder of a Los Angeles debt brokerage that often arranges agency financings, Dekel Capital, emphasized that Congress and the FHFA ought to implement any reforms with deliberation, forecasting that changes that aren’t well explained clearly in advance could startle the market.
“Anything that’s done ad hoc or very abruptly is going to create a lot of anxiety,” Ronen said. “That will impact pricing.”
Adverse reverberations, in turn, could be cataclysmic in Ronen’s home state, he explained. Sky-high land prices and zoning restraints already make it difficult enough to make the math work on affordable housing projects. Things could get immeasurably direr, he said, if the sector’s go-to financing source disappeared.
“In California, it’s very tough to find sites to build affordable housing,” Ronen said. “The availability of financing makes possible what would otherwise be totally impossible.”
This article originally appeared on Commercial Observer.