Many affordable housing advocates are asking the Treasury Department to focus on a proposal within its Fannie Mae-Freddie Mac escape plan that will protect the multifamily property segment by expanding the Federal Housing Administration's role in servicing multifamily loans. The multifamily segment of the market currently benefits from the GSEs ability to insure loans that help fund apartment housing. The GSE role in this segment and the threat of drastic reforms on Friday prompted the National Multi Housing Council to advise policy makers to exercise caution when outlining reforms that could impact the GSEs' ability to insure multifamily loans. "Quite simply, the GSEs' multifamily programs are not broken," the National Multi Housing Council said. "They have default rates of less than one percent and they actually produce net revenue (profits) for the U.S. government. They pose no risk to the taxpayer. But they — and the nation's supply of workforce rental housing — stand at risk of becoming a collateral victim of the single-family meltdown." But Michael Cox, director of the O'Neil Center for Global Markets and Freedom at Southern Methodist University's Cox School of Business, is among the critics who say the inherent problem with GSEs is that they create uncommon risks for taxpayers by insuring loans at rates which are not in line with real market prices. Cox says the GSEs in general – whether in the multifamily or residential segment – were able to offer the competitive rates simply because of government backing that hooked taxpayers to the risk. As far as moving housing finance back to the private sector he says "it's great for the market in the long run and will protect taxpayers from a too-big-too-fail society." Meanwhile, the National Multi Housing Council says on the multifamily side, the GSEs have been the only stable source of liquidity to the multifamily segment since 2008. "Over the past 40 years, there have been numerous occasions when the private sector has been unable or unwilling to finance multifamily loans," the NMHC said. "A federally backed secondary market with an explicit federal government guarantee is absolutely critical to our industry's continued health. Without the GSEs, from 2008 through 2010, there would have been widespread foreclosures of otherwise performing apartment properties because owners would have had no capital source to refinance maturing mortgages." As of this week, Freddie Mac showed no signs of slowing down in the multifamily sector. The GSE said Monday it plans to offer $861 million of newly-issued pass-through certificates backed by 44 recently originated multifamily mortgages. Write to Kerri Panchuk.