Fannie Mae, Freddie Mac Multifamily Lending Caps Hold Steady in 2019

Filed in Housing Finance, Multifamily by on November 6, 2018 0 Comments

apartmentThe 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 2019, unchanged from the 2018 caps.

In a press release announcing the caps, the agency said they are “based on projections of the overall size of the 2019 multifamily originations market, which FHFA expects to be relatively flat compared to the market in 2018.”

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 2019.

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 2019, FHFA is making the following changes to these excluded categories:

  • Loans to finance energy or water efficiency improvements. FHFA is increasing the requirements for exclusion from the multifamily cap loans that finance energy or water efficiency improvements through Fannie Mae’s Green Rewards and Freddie Mac’s Green Up/Green Up Plus programs. To qualify for exclusion from the cap, multifamily loans that finance energy or water efficiency improvements must project a minimum 30% reduction in whole property energy and water consumption and a minimum of 15% of the reduction must be in energy consumption.
  • Loans on affordable units in cost-burdened renter markets:  FHFA has developed a data-driven approach it will follow to designate markets in which units affordable to cost-burdened renters at certain area median income levels will be excluded from the multifamily cap on a pro-rata basis. The cap exclusions will be focused on markets where renters are most cost-burdened

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

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