GSEs Announce New Lending Caps for Multifamily Projects
WASHINGTON – On Sept. 13, the Federal Housing Finance Agency (FHFA) moved to impose new caps on the total amount of loans for multifamily rental properties that Fannie Mae and Freddie Mac are allowed to purchase.
Starting Oct. 1, the FHFA plans to cap the amount at $100 billion for each company, with the new cap covering the five quarters starting Oct. 1.
FHFA also will eliminate existing exemptions from such caps for “green” loans, or those used to finance energy and water efficiency improvements at multifamily properties, such as smart thermostats or low-flow toilets.
The previous plan limited purchases to $35 billion for each firm, but it did not impose limits on the amount of green multifamily loans the companies could buy. But both companies far exceeded the caps, with Fannie buying $65 billion of multifamily loans in 2018 and Freddie buying about $78 billion.
“These new multifamily caps eliminate loopholes [and] provide ample support for the market without crowding out private capital,” says FHFA Director Mark Calabria.
The agency said it would also start to exclude green loans from counting toward fulfilling Fannie and Freddie’s missions to support affordable housing, which further reduces incentives for the companies to support green lending.
Source: Wall Street Journal (09/13/19) Ackerman, Andrew
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