Apartment Industry Applauds Newest Obama Plan
Apartment Industry Commends Obama Administration For Including Commercial Real Estate In New Financial Stability Plan
WASHINGTON, DC €” The National Multi Housing Council (NMHC) and National Apartment Association (NAA) commend the Obama Administration for including commercial real estate in the Financial Stability Plan announced February 10.
The four-part plan to unlock credit markets and strengthen the still-beleaguered U.S. financial system includes expanding the Term Asset-Backed Securities Loan Facility (TALF) to up to $1 trillion and to allocate part of the program to purchase AAA-rated commercial mortgage-backed securities (CMBS).
NMHC/NAA have advocated for such actions in meetings with key lawmakers and officials at the Federal Reserve and Treasury.
“We commend President Obama, Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke for recognizing the importance of including commercial real estate in the Financial Stability Plan,” said NMHC President Doug Bibby. “Most of the attention paid to the mortgage crisis has been on the single-family finance system, but the apartment sector and other commercial real estate sectors, like so many other industries, have become collateral victims of the global financial meltdown.”
“We believe this will restore investor confidence, restart trading in the frozen CMBS market and establish a market-clearing price for a variety of real estate assets, including commercial and multifamily mortgages.”
“This action is critical because unless liquidity is restored to the commercial real estate sector, we face a serious risk of waves of defaults and bankruptcies of otherwise performing apartment properties,” explained Bibby. “In the next two years, an estimated $80-$100 billion in multifamily mortgages will mature and need to be refinanced. With credit markets virtually collapsed, however, owners who are meeting their financial obligations but who€”by sheer timing€”are in the unlucky position of having their mortgages mature in 2009 and 2010 may be forced into foreclosure.”
As part of NMHC/NAA’s high-profile effort to help restore the apartment sector’s access to capital, the organizations recently released a four-point policy statement outlining necessary steps federal officials must take, including expanding TALF to include CMBS purchases, to avoid systemic failure in the apartment sector.
More information on NMHC/NAA€„¢s four-point initiative is available at www.nmhc.org/goto/CapitalCrisis.
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