FHFA Adjusts GSE Multifamily Lending Caps

The Federal Housing Finance Agency yesterday increased 2016 multifamily lending caps for Fannie Mae and Freddie Mac from $31 billion to $35 billion, effective immediately.     

FHFA said the adjustment is consistent with FHFA’s 2016 Scorecard for the Enterprises (http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/2016-Scorecard.pdf) in which FHFA committed to review the estimates for the size of the multifamily finance market each quarter and increase the caps, as warranted.   

FHFA noted the adjustment is based on increased estimates of the overall size of the 2016 multifamily finance market. Loans in certain affordable and underserved market segments will continue to be excluded from the purchase caps.  

FHFA Director Mel Watt said the agency engaged in a thorough analysis of the multifamily market and determined that, to adjust to the realities of the market and ensure that Fannie Mae and Freddie Mac have the flexibility to continue supporting this important sector, an increase in the lending caps was warranted.  

“Supporting liquidity in the multifamily housing finance market remains a priority for FHFA and we will also continue to ensure that Fannie Mae and Freddie Mac maintain their strong support for financing of affordable and workforce housing,” Watt said.  

Mortgage Bankers Association President and CEO David Stevens, CMB, issued a statement supporting FHFA’s “data-driven approach” in reviewing the size of the multifamily loan origination market.   

“Current consensus projections for the size of the 2016 market, including MBA’s own, have increased to approximately $260 billion from earlier projections in the $220 billion range,” Stevens said. “FHFA’s review and adjustment mechanism in its 2016 Scorecard and its close monitoring of changing market conditions will support continued liquidity in workforce rental housing, help avoid market disruptions, and allow for competition among capital sources that finance this vital market.”