NMHC/NAA met with senior officials at the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac’s regulator, on October 27 to provide an update on market conditions facing the multifamily industry. We presented an analysis covering construction activity, an overview of our quarterly market survey and the status of capital markets debt sources. FHFA is analyzing whether the current $36.5 billion multifamily production cap should be adjusted based on assessments of the third quarter market conditions of this year.
Specifically, as part of the process outlined in the 2016 GSE Scorecard for Fannie and Freddie, FHFA uses industry input to make an assessment every quarter to determine the size of the multifamily market and whether an adjustment to the production cap is warranted. FHFA raised the production cap two times this year; from $31 billion to $35 billion after the first quarter and again to $36.5 billion after the second quarter assessment. NMHC is one of the sources that provides input to FHFA’s quarterly analysis.
We expect that any decision on whether to raise the cap for the fourth quarter will be made sometime in the first two weeks of November. FHFA’s decision on the production cap for 2017 is expected to be released in mid-December as part of the annual GSE Scorecard. NMHC/NAA will closely monitor the publication of each decision and communicate it once released.