The Federal Housing Finance Agency (FHFA) announced on Thursday that the 2023 multifamily loan purchase caps for Fannie Mae and the Freddie Mac will be $75 billion for each government-sponsored enterprise (GSE), for a combined total of $150 billion to support the multifamily market, according to an announcement from the FHFA.
“The 2023 caps reflect an anticipated contraction of the multifamily originations market in 2023,” the FHFA said in a statement. “To ensure a strong focus on affordable housing and traditionally underserved markets, FHFA will require that at least 50% of the Enterprises’ multifamily business be mission-driven affordable housing.”
Affordable housing remains a top priority for the government, according to FHFA Director Sandra L. Thompson, and the FHFA’s strategy is designed to support that.
“The 2023 multifamily loan caps, coupled with a new mission-driven category for workforce housing properties, will continue to ensure that the Enterprises have a strong commitment to addressing the need for affordable housing,” Thompson said. “The new workforce housing category will provide incentives for conventional borrowers to maintain rents at affordable levels for extended periods of time.”
The FHFA also made changes to selected definitions of multifamily mission-driven affordable housing in Appendix A of the Conservatorship Scorecard.
“In 2023, FHFA will allow loans to finance energy or water efficiency improvements with units affordable at or below 80% of area median income (AMI) to be classified as mission-driven, up from 60% AMI in 2022,” according to the statement. “This increase will allow the Enterprises to expand their effort on energy and water conservation measures at workforce housing properties.”
Mortgage Bankers Association (MBA) President Bob Broeksmit characterized the FHFA decision as appropriate given the current housing market trajectory.
“Given current market conditions and the expected decline in the multifamily originations market, FHFA’s slight decrease in next year’s caps is appropriate and ensures a level playing field across various capital sources,” Broeksmit said.
Broeksmit also commended the FHFA for its flexibility and commitment to affordable housing.
“MBA commends FHFA for its continued commitment to affordable rental housing, including workforce housing, and for providing stable liquidity to the marketplace. We also appreciate FHFA’s flexibility should the caps need to be increased, and its decision to streamline certain mission-driven requirements,” said Broeksmit. “MBA looks forward to continuing its work with FHFA, the GSEs, and other stakeholders to increase the supply of affordable rental housing in communities across the country.”