Slight Decline in Multifamily Lending Caps for Fannie Mae and Freddie Mac

Filed in Housing Finance, Multifamily by on November 21, 2017 0 Comments

The Federal Housing Finance Agency (FHFA) announced today that multifamily lending caps for Fannie Mae and Freddie Mac will be $35 billion for each enterprise in 2018, down from $36.5 billion in 2017.

In a press release announcing the caps, the agency said they are “based on projections of the overall size of the 2018 multifamily originations market, which FHFA expects to be slightly smaller than that market in 2017.”

Thanks to successful advocacy by NAHB, FHFA reviews the multifamily volume caps on a quarterly basis, so there is the possibility for the caps to increase if the market picks up in 2018.

However, the caps will not be reduced even if FHFA determines that the actual size of the market is smaller than initially projected.

Generally, FHFA has permitted the following loans to qualify for a full or partial exemption to the cap:

  • Targeted affordable properties
  • Small multifamily units in the 5-50 range
  • Rural properties
  • Energy-efficient properties
  • Senior housing and assisted living properties
  • Manufactured housing rental community blanket loans.

For 2018, FHFA is making the following changes to these excluded categories:

  • Loans to finance energy or water efficiency improvements. FHFA will require multifamily loans that finance energy or water efficiency improvements through Fannie Mae’s Green Rewards and Freddie Mac’s Green Up/Green Up Plus to provide a 25% energy or water savings to qualify for exclusion from the cap.
  • Loans on affordable units in extremely high-cost markets:  FHFA will add an extremely high-cost market category to address the critical shortages of middle-income housing. Units at rents affordable to those at or below 120% of the area median income in extremely high-cost markets will be eligible for exclusion from the cap on a pro-rata basis.

Read FHFA’s press release or contact Michelle Kitchen at 800-368-5242 x8352 for more details.

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