WASHINGTON, DC—The Federal Housing Finance Agency has provided more details about the changes it announced last month regarding the categories that can be excluded from the GSEs' multifamily lending cap. Typically, exclusions to the cap have included affordable housing loans, loans to small multifamily properties and loans to manufactured housing rental communities. These exclusions allow Fannie Mae and Freddie Mac to underwrite more affordable housing deals over their $30 billion cap, which the agency kept in place.

The latest tweaks excluded several other related items, the FHFA said last month.

For example, the GSEs can now exclude a pro rata portion of multifamily loan amounts, based on the percentage of units in a property affordable to renters at 60% of area median income. In addition, assisted living units for seniors can also be excluded as long as they are affordable at 80% of area median income. The FHFA says that the calculation of specific loan amounts excluded from the caps for mixed income targeted affordable housing properties will also be modified.

The agency also increased the income threshold for affordability in higher cost areas to 80% of area median income and for very high cost markets it raised it to 100% of area median income.

Following are the new details about these categories and higher cost areas.

Very High Cost Markets

Boston (which include the counties of Suffolk, Middlesex, Norfolk); certain parts of Los Angeles (including the counties of Orange, Los Angeles); certain parts of New York City (Passaic, Rockland, Putnam, Bergen, Westchester, Hudson, Essex, Nassau, Five Boroughs of NYC); and certain parts of San Francisco (Alameda, Contra Costa, Marin, San Francisco, San Mateo) have been designated very-high-cost markets.

High Cost Markets

The high-cost markets are parts New York City (the counties Dutchess, Orange, Sussex, Morris, Union, Middlesex); Bridgeport (Fairfield County), Chicago (Cook County); Riverside/San Bernardino (Riverside, San Bernardino), Washington, DC (Montgomery, Fairfax, Arlington, Alexandria, Prince George's, Falls Church City, Fairfax City, Washington, DC); Seattle (Snohomish, King, Pierce); San Jose (San Benito, Santa Clara), San Diego (San Diego); and Miami (Broward).

The type of loans excluded from the cap now include the following categories:

Targeted Affordable Housing

• Exclude 50% of the loan amount if the percentage of restricted units is less than 50% of the total units in a project, and 
• Exclude 100% of the loan amount if the percentage of restricted units is equal to or more than 50%.

Small Multifamily Properties with 5-50 Units

• Exclude the full loan amount.

Manufactured Housing Communities Blanket Loans

• Exclude the full loan amount.

Seniors Housing Units Affordable at 80% of Average Medium Income (AMI) and Below

• Exclude the pro rata portion of the loan amount based on the percentage of 80% of AMI and below seniors housing units; no high cost or very high cost adjustments are available for seniors housing assisted living units Unsubsidized/market rate affordable units at 60% of AMI or below

• Exclude the pro rata portion of the loan amount based on the percentage of units affordable at 60% of AMI and below

Unsubsidized/Market Rate Affordable Units in High-cost or Very High-cost Markets

• Exclude the pro-rata portion of the loan amount based on the percentage of units affordable at 80% of AMI and below in high cost markets and the percentage of units affordable at 100% of AMI and below in very high cost markets.