REITs looking for competitive financing might find a friend in Fannie Mae. To date, Fannie Mae has closed on over $6 billion in REIT-related multi-family mortgages including $650 million to provide debt financing for the merger of Olympus Real Estate Corporation with Walden Residential Properties Inc.t "The structure that we use mimics a product that we call the multi-family credit facility," said Alan Greenwald, director of multi-family capital markets, Fannie Mae, Washington, D.C. "I’d say about 75 percent of the top multi-family REITs have used it." Fannie Mae’s credit facility allows REITs or other qualified borrowers to draw funds for a variety of terms, in varying amounts. It may consist of a base that provides stable financing for up to 15 years, and a revolving facility that offers financing on terms as short as 90 days. In addition, borrowers can substitute, add, or release collateral to the facility on a quarterly basis throughout the life of the arrangement. Borrowers may use the funding for any business purpose, including purchase of new properties or funding of capital enhancements as needed. "The program’s flexibility means that REITs can put mortgages on a variety of properties, substitute some of those properties with new properties and not disturb the borrowing," said Greenwald. "That allows REITs to have a portfolio focus while maintaining advantageous financing." In the Olympus Real Estate Corp/Walden Residential Properties Inc. merger, Fannie Mae purchased 93 multi-family mortgages while Green Park Financial, Bethesda, MD originated loans on 86 properties and WMF Washington Mortgage Corp. originated loans on seven properties. "[Fannie Mae] played a significant role in placing the senior debt in the transaction," said Rob Landin, principal, Olympus Real Estate Corp. "I think we, Fannie Mae, put in place with a very responsible and attractive revolving credit facility that can be utilized in future Olympus multi-family acquisitions." In addition to its ability to handle large transaction quickly, Fannie Mae’s debt borrowing, at about 50 points above LIBOR (London Interbank Offered Rates) is the least expensive in the market, according to Greenwald. "You’ve got an agile company that is able to handle large capital transactions with a flexible structure and at very competitive pricing," Greenwald said. Originally designed for multi-family housing mortgages, this product now has the potential for senior living, student living, and manufactured housing mortgage finance. "We’re happy to use the product where it makes sense," he added.