On October 8, 2013 NMHC/NAA submitted extensive comments to the Federal Housing Finance Agency (FHFA) opposing a proposal to further reduce Fannie Mae and Freddie Mac’s presence in the multifamily housing markets.
On August 9, FHFA called for potentially eliminating shorter-term financing options, reducing the number of loan products available, imposing loan limits and placing other restrictions on the GSEs’ multifamily financing activities. This latest move comes on top of a 10% reduction in GSE multifamily lending activities implemented on January 1.
Our comments noted that while we share the regulator’s desire to return to a more robust private capital market is desirable, that is already happening without arbitrary caps on the GSEs’ lending. Fannie Mae and Freddie Mac’s share of new multifamily mortgages has dropped from 85 percent in 2009 to just 43 percent in 2012 as a result of market dynamics.
We noted that there are market-based or credit risk reasons to justify federal intervention, and that FHFA should not attempt to short circuit the Congressional debate on housing finance reform currently underway.
Given the potential for these proposed actions to create uncertainty and disrupt the multifamily debt markets in ways that could threaten the apartment industry’s health, we urged FHFA to take a “do no harm” position as it moves forward.