Fannie’s $536M green financing & milestone
Fannie Mae’s portfolio of green securities backed by properties with low energy consumption and ecological efficiency standards continues to grow and evolve.
The most recent addition, Green Multifamily DUS REMIC (FNA 2020-M46) securities under the Fannie Mae Guaranteed Multifamily Structures (Fannie Mae GeMS) program priced at $536 million, was issued on October 15, 2020. It also initiates Fannie’s participation in the so-called passive housing market.
“In addition to our traditional 10-year collateral, the M46 also offered investors a Green 15-year tranche for the first time,” said Dan Dresser, Fannie Mae’s senior vice president, multifamily capital markets and pricing. The M46 also was the ninth GeMS issuance of 2020 and “the third GeMS deal of 2020 backed entirely by our Green MBS collateral.”
The issuance consists of two collateral pools. Group 1 has an unpaid balance (UPB) of $455,480,942 and Group 2 a UPB of $80,182,000. The properties backing the multi-tranche Green GeMS offering are located in New York, Texas, Washington, California and Maryland.
“The M46 represents the exciting next evolution” of Fannie’s green financing program, said Chrissa Pagitsas, VP of enterprise environmental, social, governance (ESG) at Fannie Mae. “The Group 1 collateral pool includes our first Green Building Certified PHIUS+ certified deal. This is a first for the mortgage and Green Bonds industry – a securitized mortgage, backed by a property meeting passive house standards.”
The Pax Futura property is a green financing achievement, explained Pagitsas, because it was successfully designed to meet Passive House Institute U.S.’ PHIUS+ green building certification standards for properties striving for net-zero energy usage.“With microunits comprising half of its apartments, Pax Futura combines highly efficient construction, deep energy efficiency features, and renewable energy generation.”
Backed by such properties, she said, “this deal is a significant commitment on the part of the property owner and represents a major milestone not only for Fannie Mae and our lender partner, JLL Real Estate Capital, but also for the Green Bond market.”
Fannie guarantees all classes of FNA 2020-M46 will fully pay interest and principal in a timely manner to investors across the yield curve. The agency introduced its Green Mortgage backed Security (MBS) product in 2012. Since, it has issued $78.5 billion in Green MBS and $11 billion in Green GeMS.
Fannie’s Multifamily Green Financing Business provides financing through several green products that encourage apartment building owners to make energy and water savings improvements to their properties, according to the company website, including properties holding a third party, Fannie Mae-approved, Green Building Certification.
Redfin: Home prices up a record 14% in Sept.
September was a record-setting month for home prices, historically high sales growth and the fastest days on market pace ever recorded, according to real estate brokerage fintech, Redfin.
Home prices increased more than 14% year over year, marking the biggest annual increase of any month since at least 2012, and up 1.7% from August 2020.
As a result, the national median home price reached $333,900 in September, due to a growing gap between high demand fueled by record-low mortgage rates and lifestyle changes caused by the pandemic, and a historic shortage of housing supply.
“Low mortgage rates and record-low inventory are fueling historically high price growth and the fastest market in recent history,” said Daryl Fairweather, Redfin’s chief economist.
Median prices increased year over year in every single one of the 87 largest metro areas Redfin tracks. Prices were up 33.1% in Bridgeport, CT; 29.7% in Memphis, TN, marking the biggest annual increase for the second month in a row; and 23.6% in Philadelphia. The smallest price increase was in Honolulu, up 5.3% year-over-year.
The typical home that sold in September went under contract in 29 days, “the fastest pace on record,” the report found, down 12 days than a year earlier and two days less than August. For the first time since Redfin started tracking housing data, “more than half of homes nationwide went under contract in less than a month.”
“2020 will be known for a lot of things and a record-breaking year for real estate will certainly be one of its more unexpected legacies,” said Fairweather. “Demand typically abates in late summer and early fall, but seasonal patterns don’t stand a chance against the other factors motivating homebuyers this year. Homebuyers are seeking spacious homes in areas outside big cities to accommodate homeschooling and remote work.”
Home sales were up 17.6% in September, compared to September 2019 (on a seasonally adjusted basis), “another metric that represents the biggest increase since Redfin started tracking housing market data,” the report notes.
Year-over-year home sales increased in September “in all but two of the largest metro areas,” decreasing in Buffalo, NY (-6.7%) and Memphis (-1.8%). The largest increases were in Bridgeport, CT (+80.2%), San Francisco (+48.5%) and Lake County, IL +47.3%.
“It’s a great time to be a seller, but tough to be a buyer,” said San Diego Redfin agent, Charles Wheeler. “People are listing their homes and within three days they’re gone.”
September was the thirteenth straight month of declines in active listings, or number of all homes that were for sale at any time during the month. Listings fell 22.8% year over year (on a seasonally adjusted basis) to their lowest level on record, driven by intense demand.
For the second month in a row, the only two of the largest 87 metros tracked by Redfin to post a year-over-year increase in the number of homes for sale were San Francisco 51% and New York City 20%, that also are the nation’s most expensive. Nonetheless, in San Francisco, for example, home sales also were up by 48.5% year over year, outpacing national home-sale growth.
The search for more affordable markets is affecting smaller metros around the country. In Western New York, Rochester and Buffalo were two of the most competitive markets of September, with about 60% of homes in each metro selling above list price. Seattle’s smaller, more affordable neighbor, Tacoma was the fastest market in the country for the third month in a row.
Homebuying tech startup receives $5.35M seed financing
A New York based startup has introduced an innovative, completely digitized homebuilding-to-buying solution that already has attracted significant investor support. Welcome Homes, an online only residential real estate platform whose stated goal is to turn homebuyers into homebuilders through fully-online home building, customization and purchasing experiences, announced its official launch.
The launch comes after the company received $5.35M in seed financing led by Global Founders Capital, with the participation of nineteen other investors.
Welcome Homes will use the capital infusion to expand into new markets, bolster its product, sales and marketing initiatives, the startup explained in an inaugural press release, and “to streamline the home-buying and customization process, cutting by 50% the time it takes to build and move into a dream home, to six months.”
“People are desperately seeking new homes, but there hasn’t been a solution in the market that puts this within reach, so they’re settling for existing inventory,” said Alec Hartman, founder and CEO of Welcome Homes. “We believe we can dramatically change new home purchasing – customers can get a turnkey, newly built home with us for nearly the same price of the existing home next door, and they can do this all online.”
The platform offers buyers “homes priced less than existing homes in the same market,” and streamlines the entire process from land selection to customization to financing and construction, according to the company website.
Currently Welcome Homes is available in the Tri-State area, including Westchester County, NY, Greenwich, CT, and Bergen and Morris Counties, N.J., and expects to expand across the U.S.
Welcome Homes is an entirely self-serve process that removes the in-person obstacle of attending open houses and engaging with realtors face-to-face. Instead, homebuyers engage in an entirely online process “that can deliver a custom new home without ever having to see it in-person.”
They get the opportunity to tailor a home to their preferences, from scratch, as buyers can choose everything from the plot of land to the moldings, to the counter finishes. Furthermore, if typical new residential construction takes at least eight to 12 months to complete, Welcome Homes says it is able to deliver its modern homes within six months.
Welcome Homes handles the process from breaking ground to managing the project and delivering it on time, eliminating the prolonged stress of home building and buying.
“We believe the team at Welcome Homes is in the best position to create a game changing product at scale in a legacy real estate industry that is ready for change,” said Don Stalter, Partner at Global Founders Capital. “Welcome Homes is solving a clear problem by making it easier and more accessible for anyone to build a new home.”
In addition to Global Founders Capital, Welcome Homes’ seed round investors include 8VC, Adapt Ventures, Elefund, V1 VC, Kokopelli Capital, One Way Ventures, Founders First Capital Partners. Angels involved in the round include Jon Lonsdale, Qasar Younis and Lior Prosor.