FHFA Revises Multifamily Loan Caps for the GSEs

Freddie Mac headquarters

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WASHINGTON, DC—Earlier this month the Trump Administration put forth a plan to privatize Fannie Mae and Freddie Mac. Many of the outlined points required action from Congress to complete but the plan also included administrative steps that could be taken immediately. On Friday of last week with little fanfare or formality the Federal Housing Finance Agency radically changed how the GSEs will lend by taking one of those steps: it revised the cap structure on Fannie Mae and Freddie Mac’s multifamily business.

The new multifamily loan purchase caps will be $100 billion for each GSE for the five-quarter period starting in the fourth quarter of 2019 to the fourth quarter of 2020. Also, the new caps apply to all multifamily business–in other words there are no more exclusions allowed.

“These new multifamily caps eliminate loopholes, provide ample support for the market without crowding out private capital, and significantly increase affordable housing support over previous levels,” FHFA Director Mark Calabria said in prepared remarks. He also warned the GSEs need to make the capital last through the entire five-quarter period.