The Federal Housing Finance Agency (FHFA) set the 2022 multifamily loan purchase caps for Fannie Mae and Freddie Mac at $78 billion for each.
The 2022 caps will be an increase from 2021 when it was $70 billion for each of these government-sponsored enterprises (GSEs). The new caps are based on FHFA’s projections of the overall growth of the multifamily originations market. FHFA requires that at least 50 percent of the GSE’s multifamily business be mission-driven affordable housing and at least 25 percent be affordable to residents at or below 60 percent of area median income (AMI). That percentage is up from 20 percent in 2021.
“The increases of the multifamily loan purchase caps and higher mission-driven business requirements assure that the Enterprises’ multifamily businesses have a strong and growing commitment to affordable housing finance, particularly for residents and communities that are the most difficult to serve,” FHFA Acting Director Sandra Thompson said.
Also, in 2022, FHFA said loans on affordable units in cost-burdened renter markets will be classified as mission-driven, as will loans to finance energy or water efficiency improvements with units affordable at or below 60 percent of AMI.
Further, FHFA will continue to monitor impacts of COVID-19 on the multifamily mortgage market and will update the caps and requirements if necessary. However, it will not reduce the caps.
The Mortgage Bankers Association (MBA) commended the FHFA for raising the caps.
“MBA and FHFA share a common goal of increasing the supply of affordable rental housing, and we commend FHFA for its continued commitment to providing stable liquidity to the marketplace and its focus on helping renters in underserved markets,” MBA President and CEO Bob Broeksmit said. “The $78 billion caps for each GSE – an increase of $8 billion from 2021 – and the 50 percent mission-driven requirements support affordable multifamily housing and help ensure a level playing field across the various capital sources. As the economy continues its recovery from the pandemic, we are also grateful for FHFA’s flexibility should the caps and mission-driven requirements need to be updated.”