The Federal Housing Finance Agency (FHFA) today increased the 2016 multifamily lending caps for Fannie Mae and Freddie Mac from $31 billion to $35 billion, effective immediately.
The adjustment is based on increased estimates of the overall size of the 2016 multifamily finance market, which the FHFA said is larger than it had previously estimated due to continued high levels of property acquisitions and deliveries of newly constructed apartment units, as well as record levels of loan maturities requiring refinancing.
The liquidity boost is good news for investors in large institutional quality apartment assets, as loans for affordable rental units and underserved market segments will continue to be excluded from purchase caps imposed on Fannie and Freddie by FHFA.
“FHFA engaged in a thorough analysis of the multifamily market and determined that, to adjust to the realities of the market and ensure that Fannie Mae and Freddie Mac have the flexibility to continue supporting this important sector, an increase in the lending caps is warranted,” said FHFA Director Melvin L. Watt.
The multifamily lending caps are intended to further FHFA’s strategic goal of maintaining the presence of the Enterprises as a backstop for the multifamily finance market, while not impeding the participation of private capital.
Last week, we reported that Fannie Mae had issued $12.6 billion of multifamily mortgage-backed securities in the first quarter of 2016 compared to $10.4 billion in the same period last year.
Fellow GSE Freddie Mac also appeared to be pacing ahead of its multifamily-securities issuance. Through the first four months of this year, Freddie Mac had announced pricing of nearly $14.8 billion in securities offerings. That was almost double the announcement of $7.7 billion for the same period last year.
