No Change in 2017 Multifamily Lending Caps for Fannie Mae, Freddie Mac

Filed in Codes and Standards, Multifamily by on November 22, 2016 1 Comment

apartmentcomplexThe Federal Housing Finance Agency (FHFA) today announced that the 2017 multifamily lending caps for Fannie Mae and Freddie Mac (the Enterprises) will remain at the same level they were for 2016.  This means that each Enterprise will be subject to a cap of $36.5 billion of multifamily purchase volume next year.

The caps are based on projections of the overall size of the 2017 multifamily finance market, which FHFA expects to be roughly the same as it was in 2016. FHFA initially set the 2016 multifamily caps at $31 billion per each of the Enterprises, but subsequently raised the caps in response to market conditions.

FHFA reported it is announcing the caps now to maintain continuity in the market and to provide all stakeholders adequate time to plan their 2017 pipelines.

As in prior years, FHFA will review its estimates of the multifamily loan origination market size on a quarterly basis in 2017 and adjust the caps higher if necessary. However, FHFA will not reduce the caps, as this could cause disruption in the market.

Certain exclusions from the 2017 caps exist for loans in the affordable and underserved market segments.  These exclusions will remain the same in 2017 as they were in 2016 with one minor change to the exclusion for multifamily loans that finance energy or water efficiency improvements.

In 2017, for loans funded under Fannie Mae’s Green Building Certification program or Freddie Mac’s Green Certified program, a minimum of 20% of units in a multifamily project must be deemed affordable in order to take advantage of this exclusion.

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

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  1. Given tight housing supplies and increased demand for housing nearer to cities and metropolitan areas, it’s a good bet that FHFA will need to increase these caps before 2017 is out. Considering that the $36.5 billion is a relatively small amount compared to the estimated $1.5 trillion mortgage market this year, the multifamily program could be expanded markedly and would still be only a small fraction of the GSE’s business.

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