GSEs Rapidly Approaching Their 2015 Multifamily Volume Caps

Filed in Housing Finance, Multifamily by on April 24, 2015 0 Comments

ThinkstockPhotos-170885353According to data released by Fannie Mae and Freddie Mac, each of the government-sponsored enterprises (GSEs) have already used roughly one-third of their Multifamily Volume Limits for 2015. The Federal Housing Finance Agency (FHFA) set the 2015 multifamily volume limits at $30 billion for each entity.

By the end of March, Fannie announced $10.4 billion in year-to-date multifamily new business volumes. Freddie Mac’s multifamily new business activity stood at $10 billion by the end of March.  At the current pace, the GSEs could reach their multifamily volume limits by mid-year or earlier.

The rapid increase in multifamily business activity for the GSEs is driven by several factors. Deals which could not be closed in late 2014 after the GSEs approached their previous limit were pushed into the first quarter of 2015. Demand for new multifamily construction remains strong in a number of markets. Multifamily owners are also taking advantage of low interest rates to refinance their properties.

NAHB and other industry groups have contacted FHFA to determine what actions the agency might take to avoid market disruptions when the GSEs approach their volume limits. Agency sources have confirmed there are ongoing internal senior level discussions, and an announcement will be made to the industry shortly.

The 2015 volume limit for Freddie Mac was increased from the 2014 level of $26 billion. Fannie Mae’s volume limit remained constant at $30 billion. Affordable housing loans, loans to small multifamily properties and loans to manufactured housing rental communities are excluded from the cap.

For more information, email Michelle Kitchen at NAHB or call her at 800-368-5242 x8352.

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