The Federal Housing Finance Agency (FHFA) announced Tuesday that the purchase cap for multifamily loans for Fannie Mae and Freddie Mac (the Enterprises) will be $70 billion each.
The combine $140 billion to support the multifamily market will ensure a strong focus on affordable housing and underserved markets, officials said. Additionally, the FHFA will require that 50 percent of the enterprises multifamily businesses be mission-driven, affordable housing. Loans classified as supporting workforce housing properties will be exempt from the caps.
“The 2024 multifamily loan caps, coupled with the exemption for workforce housing properties from the caps, will promote the Enterprises’ continued strong commitment to addressing the need for affordable rental housing,” FHFA Director Sandra L. Thompson said. “The workforce housing exemption should encourage conventional borrowers to commit to preserving rents at affordable levels for extended periods of time.”
FHFA said it will continue to monitor the multifamily mortgage market and will increase the caps if necessary to ensure the enterprises provide sufficient liquidity and support to the multifamily mortgage market. However, the agency said, to prevent market disruption, if the FHFA determines the size of the 2024 market is smaller than initially projected, it will not reduce the caps.
Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit said the caps are “reasonable.”
“A cap of $70 billion for each of the GSEs is reasonable, given the challenging market conditions and high interest rate environment expected in 2024,” he said in a statement. “We appreciate FHFA’s ongoing flexibility should adjustments to the caps and mission-driven requirements be necessary and believe exempting loans supporting workforce housing from the cap levels will help to ensure GSE financing is a viable option for housing providers in the current environment. ”