Fifth Third Bancorp (NASDAQ: FITB) completed its acquisition of Mechanics Bank's Delegated Underwriting and Servicing business line, including an experienced lending team and a $1.8 billion unpaid principal balance servicing portfolio, according to a company statement.

The acquisition makes Fifth Third one of 24 lenders nationwide authorized by Fannie Mae to originate, underwrite, close and service multifamily loans through the DUS program. Fifth Third currently ranks as the ninth-largest U.S. bank with approximately $297 billion in assets.

Multifamily housing represents the largest component of Fifth Third's commercial real estate portfolio. The bank stated the acquisition will enhance its ability to finance multifamily housing across the United States.

"This will significantly enhance the Bank's ability to finance multifamily housing across the United States and further strengthens our leadership in commercial real estate finance," said John Hein, head of Commercial Real Estate at Fifth Third.

The DUS program serves as a cornerstone of Fannie Mae's multifamily lending platform, designed to provide liquidity and stability to the housing market. Through the program, Fifth Third gains direct access to Fannie Mae products and a servicing model.

The acquisition comes amid ongoing housing shortage challenges. A U.S. Chamber of Commerce report cited a shortage of over 4.7 million homes creating economic and social challenges including increased prices and reduced workforce mobility.

Fifth Third operates as a federally chartered institution with its common stock traded on the NASDAQ Global Select Market under the symbol FITB.