NMHC/NAA Viewpoint: It is critical to preserve the mortgage liquidity the GSEs provide across all markets and through all economic cycles. This can be achieved through: (1) maintaining the existing GSE structure; or by (2) a reformed structure that preserves the high quality and market presence of the current multifamily businesses.
One in three Americans rent, and nearly 22 million of those households are building their lives in apartments. Many factors influence the apartment industry’s health and its ability to meet the nation’s growing demand for rental housing, but the availability of consistently reliable and competitively priced capital is the most essential.
Through two recent major economic cycles the multifamily line of businesses of the Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac, produced strong results. They emerged from these economic events without reporting a loss in any reporting quarter.
More than just performing well, the GSEs’ multifamily programs serve a critical public policy role. Even during normal economic times, private capital alone cannot fully meet the industry’s financing demands. The GSEs ensure that multifamily capital is available in all markets at all times, so the apartment industry can address the broad range of America’s housing needs from coast to coast and everywhere in between. This is especially true during economic downturns where many sources of capital dry up and the GSEs play a critical countercyclical financing role.
NMHC/NAA urge lawmakers to recognize the distinct business of the multifamily industry. We believe the goals of a reformed housing finance system should be to:
- Maintain the liquidity for multifamily-backed mortgages in all markets at all times and paid for by all users.
- Protect taxpayers by keeping the Enterprises’ existing multifamily credit risk transfer models in place.
- Retain the components of the existing multifamily programs.
- Avoid market disruptions during a transition to a new status.
The GSEs are not the only source of debt capital for the multifamily market with total mortgage debt outstanding of over 60 percent of the market at the end of 2024.
