The Federal Housing Finance Agency (FHFA) has announced a revised cap structure on the multifamily businesses of Fannie Mae and Freddie Mac (the Enterprises). The new multifamily loan purchase caps will be $100 billion for each Enterprise, a combined total of $200 billion in support for the multifamily market, for the five-quarter period Q4 2019 – Q4 2020. The new caps apply to all multifamily business with no exclusions.
An important part of NorthMarq’s business is the financing we offer as a Fannie Mae DUS and a Freddie Mac Optigo lender.
The announcement from FHFA includes the directive that 37.5 percent of the Freddie/Fannie business needs to be considered mission-driven, which includes certain loans in affordable and underserved market segments.
According to FHFA Director Mark Calabria, “Multifamily housing is a critical component of addressing our nation’s shortage of affordable housing. 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. The Enterprises should also manage under the caps to provide consistent, stable liquidity to the market throughout the entire five-quarter period.”
Mission-Driven Loans Include:
- Low-Income Housing Tax Credit properties that limit rents and tenant incomes to 60% AMI levels.
- State and Local Programs that restrict rents for limited income tenants – enforced restrictions through regulatory agreement
- Section 8 Contract Properties: Tenant Income limited to 80% AMI or below
- Public Housing Authority or related non-profit: Regulatory agreement restricts rents and for limited income tenants
- Naturally Occurring Affordable Housing properties with rents at 60% AMI or below for standard markets
- Naturally Occurring Affordable Housing properties with rents at 80% AMI to 120% AMI or below for cost-burdened, very cost-burdened, or extremely cost-burdened markets
- Rural area loans with units less than 80% AMI rents.
- Small multifamily properties (5 to 50 units) with less than 80% AMI rents in standard and cost-burdened markets
- Small multifamily properties (5 to 50 units) with less than 100% AMI to 120% AMI rents for very cost-burdened, or extremely cost-burdened markets
- Manufactured Housing Loans
- Senior Housing Assisted Living Properties: Affordable at 80% AMI level rents for all markets