Apartment Loans by Agencies Creating Bubble, Chandan Says

Low-cost financing backed by the U.S. government is inflating the values of apartment buildings and threatening to create a bubble, according to a report by Sam Chandan, a real estate economist.

Multifamily loans issued by government-sponsored agencies Fannie Mae and Freddie Mac are buoying the price of apartment buildings to the point that buyers may not be able to refinance once interest rates rise, according to the report by New York-based Chandan Economics LLC, released today.