On Aug. 9, Fannie Mae and Freddie Mac’s regulator, the Federal Housing Finance Agency (FHFA), announced that it is seeking public input on strategies for further reducing the government-sponsored enterprises’ (GSEs’) presence in the multifamily housing finance market in 2014. More specifically, the statement indicates that FHFA is considering:
- Eliminating shorter-term financing options such as five-year loan products;
- Reducing the GSEs’ wide range of specialty financing offerings in favor of standardized loan products;
- Imposing multifamily loan limits to reduce higher-balance loans on the GSEs’ books and ensure they are ultimately serving lower- and middle-income households; and
- Limiting the GSEs financing activities to loans that only provide new liquidity (versus the purchase of seasoned loans or loan pools), loans that can be securitized or loans for underserved market segments.
FHFA requested that stakeholders submit their responses to the announcement within 60 days. Given industry concerns that the mandated reductions could have serious implications for the future of multifamily financing and create unnecessary uncertainty for multifamily finance, NMHC/NAA are working on a comprehensive approach to ensure that FHFA understands the impact its action could have on the future of multifamily financing.