The Market Waits For The GSEs' Caps This Week

WASHINGTON, DC–The Federal Housing Finance Agency is poised to release its annual Scorecard — namely, the goals it sets for Fannie Mae and Freddie Mac for the upcoming year — sometime this week, according to word on the street. When it does it will be a significant signal, as it is each year, about liquidity in the multifamily market. “It is definitely the headline to watch as multifamily is clearly a very important part of our overall market,” Brian Stoffers, CBRE’s Global President, Debt & Structured Finance, tells GlobeSt.com.

The scorecard usually comes out by year end but Stoffers says that the current director Mel Watt, and his team, wants to get it out and have it established before the end of his term, which is the beginning of next year. “Frankly we thought we’d have it before the end of October,” Stoffers says.

The scorecard sets the caps for GSE lending and also outlines what the categories that are exempt from these caps are. Typically the exemptions are affordable housing, rural and manufactured housing, and in recent years, green financing.

So far this year, GSE lending has been robust — and indeed the caps and exemptions set for 2018 had been considered to be sufficient to support market activity. Year-to-date through September, combined Fannie Mae and Freddie Mac multifamily loan purchase volume totaled $90.7 billion, just shy of the record-setting pace of $91.6 billion for the same period in 2017, according to new CBRE data.

Modifying the Green Exemption

For the upcoming year some changes are expected, Stoffers says. It is highly likely the FHFA will modify the green exemption, which has been a big performer for both Freddie Mac and Fannie Mae this year. Speculation has also been that the actual caps will either remain the same as this year — $36.5 billion per agency — or will be brought in slightly.